An investment scam that promised huge returns in just days has landed its operator with a hefty penalty.
The man promised to turn R300 into R1 000 in just eight days. Members of the public paid a total of R129 000 into his personal bank accounts.
The Financial Sector Conduct Authority (FSCA) has debarred Joy Praise Kgaphola for 20 years, and imposed an administrative penalty of R300 000.
HOW THE INVESTMENT SCAM WORKED
The FSCA investigated Kgaphola and Datum RS (Pty) Ltd, the company of which he was the sole director.
According to the FSCA, he used Datum’s social media accounts to solicit investments from the public.
He offered to trade in derivative instruments and crypto assets on clients’ behalf, despite not being authorised to provide those financial services.
The accounts advertised investment packages that the FSCA described as offering “unrealistically high returns” within five or eight days.
One package promised a return of R1 000 within eight days on an investment of R300.
That’s a return of more than 230% in just over a week.
WHERE THE MONEY WENT
According to the FSCA, clients deposited R129 000 into Kgaphola’s personal bank accounts.
The regulator found that he used clients’ money for personal purchases.
WHAT THE FSCA FOUND
The FSCA found that Datum and Kgaphola had:
These breached the Financial Advisory and Intermediary Services (FAIS) Act.
NOT THE FIRST WARNING
The FSCA had already warned the public about Datum RS in May 2023.
HOW TO SPOT AN INVESTMENT SCAM
HOW TO REPORT A SCAM
If you suspect an investment scam, report it to the FSCA.
HAVE YOU EVER BEEN OFFERED AN INVESTMENT THAT SEEMED TOO GOOD TO BE TRUE?
Let us know in the comments below …
