A grand seduction

09 March 2017Myra Knoesen
Myra Knoesen, FAnews Journalist

Myra Knoesen, FAnews Journalist

In a recent determination by the Financial Advisory and Intermediary Services Ombudsman (FAIS Ombud), the complaint arises out of an investment made by the complainant, following advice of the respondent. What was presented as a safe investment turned out to be nothing more than a scheme that left the investor destitute.

We summarised the determination for you but you can download the original determination here.

A promise unmaterialised

Wayne Bernard Klug, the complainant, was introduced to the first respondent Trading To Get Results, by a friend who presumably also invested through the respondent. He had never met the second respondent Pierre-Louis van der Walt personally, but was enticed to invest because of a “signing bonus” that would be added to the investment by AVA Trade.

Klug entered into an agreement with the respondent (the first and second respondent collectively referred to as the respondent) that supposedly offered Forex trading.

In terms of the agreement, Klug had to pay a registration fee of R4950, after which an online account would be opened for him, in order to track the performance of his investment. Klug further deposited an amount of R40 414.75 into an account, which is supposedly that of AVA FX. Klug was promised growth of at least 40% within the first 12 months.

After making the investment, the promised return did not materialise, and Van der Walt failed to refund the registration fee. He further failed to account for the capital invested.

Klug made various attempts to resolve the matter with the respondent. He exchanged numerous e-mails with Van der Walt where the latter promised to resolve the matter, but the matter was never resolved.

Klug was further informed of a recuperation fund, which the respondent had allegedly set up at “CM Trading”, in an attempt to recoup the losses suffered. Despite these promises, Klug has not received a single cent of his investment.

Klug’s profile shows that he did not have any previous experience of Forex trading. He invested in the belief that there would be growth of at least 40% within the first 12 months from the initial investment.

Contending factors

The respondent was further invited to respond to Krug’s contention that he was advised that he would not suffer a loss greater than 40% of the investment including the promise of refunding the registration fee. However, no response was received to either notices.

From the information that will be provided below, the FAIS Ombud is justified in making the adverse inference that the respondent was not conducting any legitimate business and had no intention of returning the complainant’s funds.

According to the determination the respondent and its representatives made extravagant promises to potential investors; promising a growth rate of 40% within one year of initial investment. The true nature of the investment was not explained to the complainant.

According to the FAIS Ombud if the respondent did in fact trade funds in a forex account, it was irresponsible and even reckless to promise a return of between 40% and 60% within one year. AVA definitely made no such promise and actually warned the public that this was a high risk investment, with the possibility that more than 100% of invested funds could be lost.

The FAIS Ombud said that there is absolutely no evidence that the respondent actually opened a trading account with AVA. There is no evidence that AVA had anything to do with the respondent. On balance of probabilities, according to the FAIS Ombud, the respondent merely downloaded the documents from the AVA website and enticed his clients to sign it. Even if an account was opened for the complainant with AVA, all the FAIS Ombud knows is that the complainant was left with a zero balance by the end of January 2015. There is no evidence to demonstrate how much of the complainant’s funds were actually traded.

According to the FAIS Ombud the respondent failed to inform the complainant that this was a high risk investment where all of his capital could be lost. The FAIS Ombud therefore ordered the respondents to pay the complainant the amount of R45 364.75.

Editor’s notes

A wise lesson to learn. When one reads about determinations, there is often a need to identify and understand the implications of the potential effects of these actions. In many ways, this shows that tighter controls are needed to bring in the bad books or rather the wrong doers in the most appropriate manner. This also serves as a reminder to our readers, the financial advisers, to talk to clients about investments that are ‘too good to be true’. Do you agree? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts


Added by Eric, 10 Mar 2017
re "The Trader College" they have absolutely no footprint of any sorts, be it a website nor complaints ....

I would stay away.

Perhaps they traded previously under "Stock Market College" .. see Hello Peter too many compliants
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Added by Arnold, 09 Mar 2017
My O My. Thank God for trustworthy advisors. The balance stays in honest advisors favor in volumes else there would never be any investment again. I just spoke to a individual that recently retired with only praise to his advisor that helped him with his dream of successful retirement.

On the facts in this article one cannot call the respondent a advisor any more than calling a robber a charity collector.

Jail for that robber I would say.
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Added by Cuban, 09 Mar 2017
It is high time that these crooks get jail time and thus a criminal record.
This was theft, the complainant won't see a cent and the respondent most properly stole other peoples money as well.
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Added by Wilhelm, 09 Mar 2017
I was approached by "The Trader College".
I am not sure if it is legit.

Can You perhaps assist by telling me if they are?

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