Author: Julius Cobbett
Date Published: 31 October 2013
Financial Planning Institute says it is finalising charges against members.
JOHANNESBURG – Brokers who sold the investment products of the late Herman Pretorius were paid commission of “at least” R100m. This is according to the most recent letter from the curators of his failed investment scheme, the Relative Value Arbitrage Fund (RVAF). A copy of the letter can be downloaded here.
It has been more than a year since Pretorius shot first his former business partner and then himself. The incident confirmed what some had already suspected: Pretorius had been running a massive Ponzi scheme. It has been estimated that the scheme took roughly R2.2bn from 3000 investors.
Both the Financial Services Board (FSB) and the Financial Planning Institute (FPI) have launched investigations into brokers who peddled the scheme. But there has been no disciplinary action announced as yet. Likewise the financial advice ombudsman Noluntu Bam has yet to issue a determination connected with a Herman Pretorius investment.
Earlier this year the RVAF identified Michal Calitz as one of the more prominent brokers. Calitz, who was a close friend of Herman Pretorius, received more than R15m from the scheme.
Calitz is still a representative of Impact Financial Consultants CC, which is an FSB-authorised financial service provider.
Calitz is also listed on the FPI’s website as a valid member.
The FPI tells Moneyweb that it is finalising charges against members in relation to the RVAF. It says it will only pronounce on the matter once a disciplinary hearing has been held. The hearing is expected to be held in December, the exact date yet to be confirmed.
“In terms of the FPI’s Disciplinary Regulations the outcomes of disciplinary hearings will be published – however, this is done once the matter is finalised and the period for an appeal has expired,” it says.
Similarly the FSB says its own investigation into the Herman Pretorius matter is not finalised yet as the “FAIS supervision department is still in a process of engaging with the identified financial services providers and other interested parties”.
The RVAF’s curators are trying to trace investor money that was moved by Pretorius to the UK and Switzerland. The curators have appointed attorneys in both those countries to assist them trace the funds.
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