Latest news with #Banxso
IOL News
5 days ago
- Business
- IOL News
NPA Hit with Massive Legal Bill After Botched Banxso Case
Taxpayers left to foot nearly R500,000 after prosecutors' failed funds grab backfires in court. Image: IOL / Ron AI The National Prosecuting Authority has been ordered to pay a costs order approaching half a million rand after their attempt to freeze Banxso's funds collapsed on appeal, leaving South African taxpayers to shoulder the financial burden of what legal experts describe as a fundamentally flawed strategy. The costly legal defeat began when the NPA secured what appeared to be a straightforward victory through an ex parte application. This legal procedure allows only one party to present their case to the court without the opposing side being present or having an opportunity to respond. "Ex parte applications are supposed to be reserved for genuine emergencies where there's a real risk of assets disappearing overnight," explained a senior legal practitioner. "The fact that this preservation order was successfully overturned on appeal suggests the original application may not have met the stringent requirements for such urgent relief." Banxso successfully challenged the preservation order through a Reconsideration Application, resulting in the court not only overturning the original ruling but imposing substantial legal costs on the NPA. Liquidation Proceedings Present Far Greater Risk The NPA's financial setback, whilst significant, represents only a fraction of the potential costs exposure facing applicants in the ongoing liquidation proceedings. The main liquidation case, which has been progressing through the courts since October 2024, involves substantially more complex legal issues and protracted hearings. Judge Le Grange heard the liquidation application in early May, but judgment remains pending. Legal sources suggest the extended timeline and complexity of liquidation proceedings could result in costs orders exponentially higher than the NPA's bill. "When you're dealing with liquidation applications of this magnitude, costs can spiral very quickly," said a liquidation expert with extensive experience in commercial insolvencies. "The NPA matter was relatively straightforward compared to what we're seeing in liquidation proceedings. If that resulted in costs approaching R500,000, we could be looking at exposure running into tens of millions for the main case." The expert noted that liquidation proceedings typically involve multiple postponements, extensive documentation, and lengthy court hearings—all factors that contribute to escalating legal costs. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Strategic Legal Positioning Banxso has requested that the court grant a de bonis propriis order against Mostert and Bosman Attorneys. This legal mechanism would make the attorneys personally liable for costs rather than their clients bearing the financial burden. "A de bonis propriis order is a serious remedy that courts don't grant lightly," the legal source explained. "It essentially means the lawyers would pay costs out of their own pockets. Courts typically only make such orders where there's evidence of improper conduct or where attorneys are seen to be the real driving force behind litigation." Banxso has consistently maintained that the applicants are being used by their legal representatives, who allegedly stand to benefit financially from liquidation proceedings regardless of the outcome for creditors. This argument gained judicial attention when Judge Le Grange questioned why the applicants would reject Banxso's offer of security for their claims in favour of pursuing liquidation proceedings that would yield only 15 to 50 cents on the rand in the best-case scenario. Section 381 Implications During proceedings, Advocate Rudi van Rooyen, representing the applicants, referenced the possibility of a section 381 application. This provision would allow provisional liquidators to apply for extended powers equivalent to those of finally appointed liquidators, including authority to institute commissions of enquiry and appoint expensive legal teams. "Section 381 applications can dramatically increase costs because they essentially give liquidators carte blanche to investigate and litigate using the company's own funds," the liquidation expert noted. "It's a powerful tool, but it can also be expensive for all concerned." Judge Le Grange observed that such an application would effectively allow Banxso's money to be used to fund litigation against the company itself, reinforcing Banxso's argument that liquidation primarily benefits attorneys and liquidators rather than creditors. Financial Consequences Mount The NPA's substantial costs order will be paid from government coffers, adding to taxpayers' financial burden. The failed preservation strategy has resulted in the state bearing the cost of unsuccessful litigation whilst achieving none of its intended objectives. Meanwhile, the applicants in the liquidation matter face potential personal liability for costs that could exceed the NPA's financial exposure by significant margins. Industry observers note that liquidation proceedings involving Mostert and Bosman have previously resulted in substantial legal fees being deducted from creditor payouts. "The pattern we've seen in previous matters suggests that legal costs can consume a significant portion of available funds," the liquidation expert observed. "Creditors often end up receiving much less than anticipated because of the fees involved in the liquidation process." Financial disclosures from the Mirror Trading International liquidation revealed that Mostert and Bosman had levied legal costs exceeding R24 million by September 2023, with creditors still awaiting dividend payments and a second Liquidation and Distribution account remaining unpublished. Pending Judgment The contrast between the NPA's failed strategy and Banxso's defensive approach has become increasingly apparent. Whilst the state prosecution authority faces a substantial costs order for unsuccessful litigation, Banxso continues defending its position and seeking to protect client interests through the judicial process. As the legal community awaits Judge Le Grange's judgement, the NPA's costly defeat stands as a stark reminder of the financial consequences when aggressive legal strategies backfire in the commercial courts.
IOL News
19-05-2025
- Business
- IOL News
The Scapegoating of Banxso: How Regulatory Overreach Missed the Bigger Picture
Is Banxso being unfairly targeted by South African regulators while a network of deceptive marketers operates unchecked? Image: IOL / Ron AI In what appears to be a clear case of regulatory tunnel vision, Banxso remains in the crosshairs of South African financial regulators, while an entire ecosystem of deceptive affiliate marketers and trading platforms continues to operate with relative impunity. Instead of tackling the root problem—an unregulated network of third-party marketers exploiting social media and celebrity endorsements to mislead investors—the FSCA has disproportionately targeted one entity: Banxso. Banxso's regulatory ordeal began with the suspension of its licence by the FSCA, triggering costly legal battles and severe reputational damage. Yet, as evidence continues to surface, it becomes increasingly apparent that the marketing tactics at issue are widespread across the sector—not unique to Banxso. Recent investigations have uncovered that Trade FT, operating under FSP number 53871, is linked to Grand Trading Pty Ltd. The individuals behind these entities previously operated under the name Asterix Data and have a well-documented history of rebranding and shifting identities within what's been referred to as the 'Scam Empire' a network that includes Finbok and other flagged entities. Despite their consistent use of deceptive AI-themed advertisements featuring unauthorised images of celebrities like Patrice Motsepe, Elon Musk, and Trevor Noah, these firms have not faced equivalent regulatory scrutiny. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading This raises a critical question: why has Banxso been singled out while others using the same misleading marketing tactics continue to operate freely? 'What we're seeing is a classic case of making an example out of one company while failing to address the systemic issues,' said an industry insider who spoke on condition of anonymity. 'Banxso has become the convenient scapegoat in a situation that clearly involves dozens of market participants.' These celebrity-endorsed AI ads act as a gateway into the broader problem. A single click on one of these ads floods users with unsolicited calls from various South African trading companies—none of which are connected to Banxso. This indicates the involvement of an aggressive affiliate marketing network, which is largely unregulated and responsible for generating deceptive leads across the industry. Importantly, the FSCA's own registry reveals glaring red flags about Trade FT: there are no registered Key Individuals listed for its FSP number. In any other instance, this would typically trigger immediate enforcement action. Yet, despite the entity's lineage and irregularities, it continues to operate, untouched. Meanwhile, Banxso is the only firm in the industry to have voluntarily refunded R14 million to affected consumers in the wake of the scandal—a step no other trading company has taken, despite similar marketing exposures. 'The FSCA has created a false narrative that this is about one bad actor when it's clearly an industry-wide marketing issue,' said a second compliance expert with deep experience in South African financial services. 'Operations like Trade FT continue unabated, using identical tactics. Yet Banxso is being paraded as the poster child for enforcement.' This disparity in enforcement undermines the credibility of the FSCA's regulatory objectives. If the aim is truly to protect consumers, why focus enforcement on a compliant FSP that has shown a willingness to rectify issues, while letting a complex web of non-compliant and identity-shifting entities off the hook? 'There's a fundamental unfairness when one company bears the full regulatory burden while others benefit from the same marketing channels without scrutiny,' added the first industry source. 'If the FSCA truly wants to protect consumers, they need to address the underlying marketing ecosystem rather than targeting individual FSPs.' The situation is especially concerning given how easily these deceptive ads continue to reach South Africans online. Despite the regulatory action against Banxso, the same misleading advertisements are still well and truly thriving in their absence. In response to inquiries about the issue, the FSCA stated: 'In terms of section 251 of the Financial Sector Regulation Act No.9 of 2017 (FSR Act), the FSCA is unable to disclose the details of the investigation relating to Asterix.' This response only deepens concern over the transparency and fairness of the process. The lack of visible enforcement against the real drivers of consumer deception—the affiliate marketers and identity-hopping entities like Trade FT—suggests that the FSCA may be prioritising symbolic enforcement over meaningful consumer protection.
IOL News
15-05-2025
- Business
- IOL News
Misleading Narratives and Sensational Claims: The Flawed Logic Behind the Banxso Scandal Story
Explore the troubling allegations against Banxso in the wake of a Moneyweb article, as we dissect the evidence—or lack thereof—behind sensational claims and the potential consequences for media integrity. The recent Moneyweb article titled 'Banxso refund scam escalates into sexual blackmail: Victim speaks out' presents a harrowing tale of digital manipulation and emotional trauma. However, while the human impact of such crimes deserves sympathy, the article makes a significant leap — suggesting, without hard evidence, that Banxso is somehow connected or responsible for the actions of the criminal network behind this scam. This inference rests almost entirely on an alleged use of the same email address once associated with Banxso, any further indicators as to how the perpetrators gained the victims confidence have not been shared within the article. That threadbare link forms the foundation for a serious public accusation, yet no concrete evidence is offered to support a claim of corporate wrongdoing. 'There's a big difference between a bad actor impersonating a platform and the platform being complicit,' noted a regulatory advisor familiar with South Africa's financial services licensing regime. 'From what I've seen, the story relies on implication, not investigation. 'By the article's very inferences the FSCA are guilty of running a WhatsApp scam not the victims of identity theft.' This is in clear reference to an alert issued on the FSCA's (Financial Service Conduct Authority) social media pages a few weeks ago where they chastised the usage of an AI generated deep fake video impersonating their commissioner Mr. Unathi Kamlana to sell a trading tool called NBSG Securities or Nedbank Securities. The notice further highlights this is a scam and the use of logos and names is unauthorised. Banxso has consistently denied any role in this or any other scam. Through its attorneys, Hanekom Attorneys, the company has reiterated that no data breach has occurred, and that no client data has been compromised or sold. 'Our client has not sold, shared, or otherwise disseminated client data to unauthorised third parties. Any suggestion to the contrary is false and defamatory… Further, our client has not experienced any confirmed data breach to date,' reads a formal letter submitted to the publication prior to release. They further assert 'In the circumstances, whilst our client again unequivocally denies the allegations and reaffirms the robustness of its security protocols, we formally request that any future enquiries be submitted in a bona fide manner, clearly delineating new and verifiable information warranting a response. Failing which, our client reserves the right to decline any further engagement on the subject matter.' Yet Moneyweb published the story — one in a string of articles targeting Banxso — while giving minimal weight to these denials. This raises questions about intent, especially given the timing of events.
The Citizen
12-05-2025
- Business
- The Citizen
Banxso refund scam escalates into sexual blackmail: Victim speaks out
Scammers are using increasingly sophisticated tactics – including remote access, stolen personal data, and sexual extortion. The account from the former Banxso client reveals the full extent of how manipulative and predatory these fraudsters have become. Picture: AdobeStock The underworld of financial scammers is becoming increasingly sophisticated – and far more aggressive. In some cases, they have resorted to extortion, including threats to distribute nude images of victims to force them into withdrawing criminal complaints. Since early last year, Moneyweb has uncovered how Banxso, licensed by the South African Financial Sector Conduct Authority (FSCA), benefited directly from a wave of fraudulent social media advertisements. These ads falsely featured celebrity billionaires such as Elon Musk, Johann Rupert and Patrice Motsepe promoting investment products that promised extraordinary monthly returns of up to R500 000 from initial investments as low as R4 700. Despite Banxso's repeated vehement denials of any links with the ads, the FSCA provisionally suspended its licence in October last year. However, shortly thereafter, a new and more insidious scam surfaced. Posing as officials from regulators like the British Financial Conduct Authority (FCA), fraudsters began contacting Banxso victims with a pitch: the money they lost had been invested in cryptocurrency. The funds, they claimed, had also grown significantly due to the recent surge in cryptocurrency prices. They offered refunds subject to a 'processing fee' or commission. The FSCA issued a warning regarding this scam early this year. Banxso denied any links to this scam. The refund scam is highly professional and personalised, as the fraudsters have personal information that the victims believe could only have come from their Banxso profiles. Moneyweb has received numerous inquiries from former Banxso victims asking whether this refund offer is legitimate, indicating how believable the approach is. However, a recent account from a former Banxso client reveals the full extent of how sophisticated, manipulative, and predatory these fraudsters have become. ALSO READ: New scam targets Banxso victims using their personal data Maria The former Banxso client contacted Moneyweb and provided an alarming account of how her interaction with the 'refund' scammers led to more than R200 000 being stolen from her bank account. When she later laid a criminal charge, the scammers threatened to distribute sexual images of her to colleagues and on social media unless she withdrew the complaint. The individual has asked to remain anonymous for obvious reasons, but came forward to warn others about how professional, dangerous and manipulative these scammers have become. She holds a senior position at a prominent South African institution. Let's call her Maria. In her conversations with Moneyweb, Maria repeatedly described herself as 'stupid', 'naive' and 'ashamed' for falling for the scam. But she chose to speak out, hoping her experience would warn others. ALSO READ: The FIC busts Banxso The nightmare started with Banxso Maria's nightmare began when she responded to a fake advertisement and became a Banxso client. However, after losing some money, she realised the platform was extremely risky and closed the account. Then, in December last year, she received a call from someone claiming to be a 'representative' of the British financial regulator, the FCA. He alleged a third party 'stole money from her Banxso account' and used it to trade in cryptocurrency, earning a profit of $200 000, or approximately R7.5 million, which they wanted to refund to her. She investigated and confirmed on the official FCA website that the 'representative' was indeed employed by the regulator. (The FCA has repeatedly warned the public that its and its employees' identities are used in scams.) Maria also stated that the supporting documentation sent to her was very professional and seemed legitimate. The scammer said she had to pay 6% of the funds due to her into a cryptocurrency account in her own name, allegedly to 'put the money into circulation'. This amounted to R120 000. Maria opened a Binance account and was instructed to transfer the R120 000 into this account. 'My bank didn't allow me to transfer more than R10 000 per day to the Binance account, so it was tedious,' she said. After paying R40 000, the scammers instructed her to pay the balance into an Absa account of an individual unknown to her. 'I baulked at this, not wanting to pay a random person who could just disappear with my money,' she explained. The scammers then said that the Absa account holder was a pastor who worked with them and would assist in putting the money 'into circulation'. Maria then paid the balance into the Absa account. Only afterwards did she realise the R40 000 she had transferred to her Binance account was never reflected. 'It disappeared into thin air,' she said. ALSO READ: Banxso continues to take money despite banks freezing its accounts Exodus app The scammers then instructed Maria to download the Exodus app, a crypto trading platform, and log into an account already opened in her name. This account showed a balance of more than $200 000 in cryptocurrency due to her. However, the scammers wanted to use a different bank account due to the security measures of her primary bank. Maria had an account with another bank and, on request, allowed the scammers to remotely access her computer via AnyDesk (software that allows a third party to take control of a computer remotely) to assist with linking the account to her Binance wallet. 'It wasn't minutes after I'd done that when two payments went off from my account – totalling more than R200 000. I never had to authorise the payments on my banking app, and the amounts were far above my daily banking limit.' (The bank investigated and determined that the 'pay and clear' function was used, where the limit is R250 000.) Maria immediately reported the fraud to the bank and opened a criminal case with the police. Despite this, the scammers continued contacting her and claimed they were 'working' on finalising the refund. 'Suddenly, they asked if the email I used for Banxso was the same as the one I used for Binance. I said yes, and they berated me endlessly – saying the transfer failed because I had used the same email address.' Next came a demand for an additional $3 000 to cover the costs of a so-called 'recovery team' if she 'ever wanted to see her money again'. Maria refused. 'I told them I had less than R1 000 left in my bank account – which was true – and I couldn't pay anything.' ALSO READ: Banxso agents allegedly mislead clients on licence status Demand for more money That's when the situation spiralled out of control. Another scammer, a man, then contacted Maria and offered to pay the $3 000 on her behalf – but demanded something in return. 'He said he wanted an hour of my time. He told me he had a crush on me and wanted to see me. I refused.' After a few days, the man repeated his offer: he would pay the money if Maria agreed to speak to him for an hour on the phone. Reluctantly, she agreed – and he initiated a video call. 'We didn't speak long before he asked me to remove my clothes. I was, of course, reluctant. I'm a decent person – I wouldn't even send a boyfriend a naked photo of myself. But I was in too deep. I needed my money back. I showed him glimpses, careful never to show my face and body simultaneously … He took screenshots of my face and body and used them to blackmail me later.' ALSO READ: FSCA warns consumers about investments with these unregistered entities 'Refund' of R70 000 Following this interaction, R70 000 was paid into Maria's bank account. Shortly afterwards, another scammer phoned her and offered to help put the money into 'circulation' – but the attempt failed as her bank froze her account due to a 'fraudulent transaction'. The next day, a man – referred to here as James – contacted Maria and claimed the R70 000 had been transferred from his account. He said he had reported the transaction to the bank, which triggered the suspension of her account. Maria later refunded James. Despite this, the fraudsters continued to contact her, repeatedly asking whether her bank account was still frozen. 'I then made the mistake of telling them I opened a case with the police regarding my missing money,' she said. ALSO READ: FSCA investigates Banxso agents' claims that it 'has been cleared' Nude pictures Then all hell broke loose. The video-call man sent nude images to Maria from screenshots he took during their previous interaction. He threatened to distribute them to her colleagues unless she withdrew the criminal case. 'It was a Friday when I phoned the detective unit at the police station to withdraw the case. They told me the detective was unavailable and to come in the following Monday.' Later that same Friday, the scammers called again, threatening consequences if she didn't drop the case. 'I told them I had already spoken to the police and would go in on Monday. But they kept yelling, demanding that I withdraw immediately.' The video-call man also phoned again and insisted Maria remove her shirt. 'At that stage, I lost it and told him to do whatever he wanted and ended the call,' she said. Maria withdrew the criminal complaint and never heard from the scammers again – and the nude images were never disseminated. However, she lost more than R200 000. ALSO READ: Banxso victim launches liquidation application Response from Banxso In response to detailed questions from Moneyweb regarding how the scammers came into possession of the victim's Banxso account details, Hanekom Attorneys, acting on behalf of Banxso, denied any wrongdoing and rejected all suggestions that client information was leaked or accessed by unauthorised parties. 'Our client has not sold, shared, or otherwise disseminated client data to unauthorised third parties. Any suggestion to the contrary is false and defamatory. Further, our client has not experienced any confirmed data breach to date and has, moreover, proactively investigated all credible security concerns raised either internally or externally. These investigations have yielded no findings that suggest any compromise or misconduct on the part of our client. Our client will not, in any event, disclose confidential investigative findings to individuals who have consistently demonstrated a disregard for responsible journalistic standards,' the letter reads. The letter also criticised Moneyweb's reporting: 'It is both ironic and deeply concerning that you now express concern over scams targeting former clients, particularly when your own repeated publication of unfounded claims, speculation, and inflammatory narratives has directly contributed to the climate of fear and distrust that such scammers exploit.' Read the full response here. Banxso and several related entities and individuals have instituted legal action against Moneyweb and this author. These include Banxso owner and director Harel Sekler, former Banxso director Warwick Sneider, AfriMarkets, and former Banc de Binary CEO Oren Shabat Laurent Moneyweb is defending the claims. This article was republished from Moneyweb. Read the original here.
IOL News
06-05-2025
- Business
- IOL News
Banxso Liquidation Case Kicks off in Western Cape High Court
Live coverage of the Banxso liquidation case unfolds in the Western Cape High Court, as investor Carol Margret Wentzel challenges the trading platform's practices amid allegations of fraud. Image: IOL / Ron AI The liquidation application against trading platform Banxso, brought by investor Carol Margret Wentzel, commenced on Monday in the Western Cape High Court before Judge Le Grange. Judge Le Grange, who appeared well-versed in the extensive case documentation, immediately delved into critical aspects of the proceedings. Early into the hearing, he raised questions about a website established by liquidators to gather support for the application. Advocate Van Rooyen, representing Wentzel, had mentioned the site collected approximately 2,000 responses potentially representing hundreds of millions of rands in claims. The Judge expressed concern about the practice of soliciting support for specific liquidators before claims were properly lodged, questioning whether this constituted inappropriate touting. He further inquired why experienced investors would need such assistance if the allegations of fraud were legitimate. When discussing the rejection of a settlement offer, Judge Le Grange questioned why Wentzel would decline an offer of full security paid into Banxso's lawyers' trust account in favour of liquidation proceedings that might yield significantly less compensation. Van Rooyen argued that the Consumer Protection Act established that companies paying referral fees constituted a Ponzi scheme, suggesting that if Banxso paid referral fees and bonuses to client accounts, it implied the use of client funds as the only explanation. This assertion appeared to generate some confusion in the courtroom with no one expecting him to raise the trading business potentially being a Ponzi scheme as an argument in the matter. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The proceedings took an interesting turn when one of Banxso's counsels, Advocate Prinsloo, applied to strike certain evidence from the record. Prinsloo argued that the Financial Sector Conduct Authority (FSCA) had improperly complied with a subpoena issued by the applicant's attorneys, Mostert and Bosman, which demanded all documentation and transcripts related to the Banxso investigation. The defence contended that such subpoenas were inappropriate for motion court proceedings. Judge Le Grange questioned the timing of this application, noting that if the information was already available, removing it now might disadvantage the applicant's case. The FSCA responded that they had complied with a valid subpoena and had not colluded with the applicants or liquidators.
