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FSB up in arms

16 May 2013 Fiona Zerbst
Fiona Zerbst, FAnews Online Editor

Fiona Zerbst, FAnews Online Editor

South Africans took to Twitter to vent their frustration with the sentence handed down to J Arthur Brown by the Western Cape High Court yesterday. Brown’s sentence – a fine of R150 000 or 36 months in prison – is patently little more than a slap on the wr

“Strange world we live in. Stormers fined R230000 for abusing ref. J Arthur Brown defrauds millions at Fidentia. Sentenced to R150000 fine,” tweeted Brenden Nel. “J Arthur Brown: R150000 fine while mineworkers’ widows and orphans live in poverty. Justice, nê?” tweeted Mmanaledi Matagobe.

In a statement released yesterday afternoon, the Financial Services Board (FSB) said it was ‘disappointed’ with the sentence because it ‘does not acknowledge the extent of the damage caused by Mr Brown’s actions’. Brown was convicted on two counts of fraud which allowed him access to funds intended for the beneficiaries of Mantadia (Matco), which was renamed the Living Hands Umbrella Trust by Fidentia.

This sentence does nothing to deter white-collar criminals and only furthers the perception that crime can pay.

“The Regulator had hoped that Mr Brown would be sentenced to a jail term that adequately reflected the seriousness of the crimes he has admitted to committing (at least the prescribed minimum of 15 years),” the FSB stated. “The type of sentence handed down today does very little to inspire the public’s confidence in the country’s judiciary system.” That’s possibly an understatement.

The National Prosecuting Authority (NPA) will no doubt appeal the sentence; in the meantime, the FSB says it respects the decision of the court and will abide with it. While Judge Anton Veldhuizen says Brown’s ‘trauma and personal suffering’ played a role in the judgment, one can only ask if he gave any thought to the trauma and personal suffering of the victims, who do not even have the satisfaction of seeing Brown punished. He is effectively walking away a free man.

Spotlight falls on the curators

Not everyone wants to see Brown behind bars, though. About 500 former mineworkers are now intent on suing the Fidentia curators, Dines Gihwala and George Papadakis, saying they believe Brown can help them to recover their money.

We know that Brown has made allegations against the curators in the past, so it isn’t surprising that he’s fashioning himself as some kind of post-trial Robin Hood, vowing he won’t rest until the money is recovered from the curators. An article published in Noseweek magazine alleged that the curators have defrauded the companies under their curatorship of millions. There doesn’t appear to be any hard evidence of this, however.

What we do know is that the curators’ forensic accounting fees amount to R15m to date.

Brown has also alleged that the FSB has been gunning for him to protect financial services companies that Fidentia was taking business away from – the notion being that the FSB’s executives have been trying to enrich themselves by means of the appointed curators. Small wonder that the FSB is not happy with Brown’s lenient sentence.

The sad, sorry saga continues...

Editor’s thoughts:
Considering that Fidentia’s financial director, Graham Maddock, received a seven-year jail term for confessing to his fraudulent activities and turning State witness, you’d be forgiven for thinking justice in South Africa is, well, unjust. What do you think of the sentence? Do you think the State bungled its case against Brown? Comment below or email fiona@fanews.co.za.

Comments

Added by Christo, 19 May 2013
Ek stem saam met C Venter dat die beslissings en straf wat makelaars deur die Ombudsman gegee word glad nie sin maak as jy na die Brown uitspraak kyk nie.
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Added by Hissing Mad, 17 May 2013
This ridiculous sentence is laughable and makes a mockery of the deluge of legislation the FSB has drowned our Industry in (at great cost to all concerned), yet clearly shows their inability to bring the "real crooks" to justice!! *face palm* Perhaps they should spend less time witch hunting the innocent and concentrate more on the bigger issues at hand, such as the AJB's who continue to be footloose and fancy free! Question: Why did the FSB not INSIST on presenting their damning evidence to the NPA?
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Added by Fergus, 16 May 2013
The responsibility for failing to adequately try Brown rests squarely with the NPA and prosecution. Unfortunately there is a growing trend of this sort of apparent incompetence from the NPA and prosecution. Hopefully this is not the way of the future.
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Added by JD, 16 May 2013
A bit rich, the criticism from the FSB! A judge makes a judgment based on the material placed before him by the prosecution. For the FSB to criticise the judgment is a bit like the chef blaming the diner for a crappy meal. No-one disputes that we need a better-regulated financial services environment. But to do that we need a better regulator.
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Added by Graham, 16 May 2013
Have to agree with JD there. FSB's handling of the whole thing sucks!
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Added by Albundy, 16 May 2013
For the amount of that went missing, the sentence is laughable. Hopefully the FSB has already debarred the criminal and keeps a sharp eye out for him popping up as a director of other FSP's. This man should be barred from the financial industry for life with no appeal, ever. He shoudn't even be allowed to be a teller in a bank or a money transit guard!
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Added by Daniel, 16 May 2013
I believe the FSB & NPA should hang their heads in shame, the judge did not find him guilty of any fraud relating to the orphans and widows but on two techinicalities relating to the mandate to invest funds. 2 charges out of 190+? How did the FSB allow this man to even be in the position to steal all these funds? The sentence seems correct w.r.t charges he was found guilty of.
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Added by Lorraine, 16 May 2013
This is an absolute travesty of juctice. Brown's suffering and trauma. Who gives a fig about that. After seeing photos in the newspaper of him in a luxury home in Sunset Village with his girlfriend and driving a luxury car. What about the misery he has caused? Was this case that lasted aprroximately 6 years, not properly investigated, to allow this man at the end of the day to plead guilty to two of the lesser charges. Why does Brown think the FSB is gunning for him, when they 'respect the judgement" It is correct that Maddock got a 7 year sentece and he gets R150 000. I am most disappointed and disillusioned
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Added by Cynic, 16 May 2013
The FSB has made comments about the Judge that quite frankly amount to contempt of court and show scant respect for the judicial process. The sentence was appropriate for the charges to which the prosecution/FSB agreed. The error lies solely in prosecutorial incompetence by the State/FSB and for them to now publicly to try and shift accountability to the Court is obscene and reflects poorly on the integrity of the FSB. To make their Press Statement comments about the judge without reference to his published reasons; is evasive and is an attempt to shield FSB officials from accountability for this botched prosecution. If this prosecution had been done properly, the sentence would have been different and the Judge in criticising the prosecution and commented, inter alia, ".....if the FSB's findings were factually correct, it was "astounding" that the State had only brought certain charges against Brown and accepted his plea of guilty on two counts. This press statement by the FSB is a shameful attack on the judiciary in an attempt to mask their own incompetence. For the record, this writer believes Brown should have been incarcerated for 15 years, subject to him being found guilty of what we all suspect him of doing.
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Added by BestAfterTheVerdict, 16 May 2013
Typical FSB - if my mind serves me right the FSB issued the license to Fidentia. and the FSB failed to act when warned early already by the press. The FSB sole concern is generating ridiculous procedures and notices, and collect annual fees. O yes and do not forget the ridiculous "Parrot Exams" they generate. The FSB should be held accountable in this instance! And what did the FSB and PA expect if they agreed to a plea that does not include defrauding Funds?? You get punished for what you were found guilty of! To cry Wolf is not going to help anybody! The ARROGANCE and INCOMPETENCE of the FSB got exposed BIG TIME! And nobody still knows what was AJB's role in all of this!
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Added by dr.zeek, 16 May 2013
The FSB and the NPA are the guilty parties here. It appears from the Press reports that neither the FSB nor the NPA properly charged or prosecuted Brown. The allegation that the FSB is great at promulgating reams of legislation & regulations but terrible at enforcing ANY of it sticks...
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Added by Nick, 16 May 2013
The only justice is to follow the sincere intuition of the soul, angry or gentle. Anger is just, and pity is just, but judgement is never just.
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Added by Pheladi, 16 May 2013
FSB has allowed that the case of Mr Brown become easy, by not helping the judiciary. Therefore they should not rush to the media to cover themselves as if they are not part of the people who were suppose to bring evidence to the court.
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Added by Elsie, 16 May 2013
This is outrageous! Even Brokers who have been misled by these these investment companies are punished heavier,whilst CEO's and Directors of Companies get away. Just think of ShareMax and all the other corrupt directors.
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Added by Sharemaxine, 16 May 2013
Ek lag nou lekker oor hierdie gedoente. Die hele storie maak 'n bespotting van die regstelsel. "Disband " die FSB . Herstel die skerpioene . Fire vir Gerry Anderson . Dit is al lankal overdue. Picvest,bluezone , Sharemax ,Blaaubergstrand se hotel skapade gaan in dieselfde sirkus ontaard.Die makaars moet hoes en betaal.Die FSB vat al hierdie organisasoes se part en staan teen adv N Bam se bevndings. Dube Tshidi ,nie seker hoe jy sy naam spel nie van bo tot onder het some explaining te doen. White collar crime is die oorwinnaars.Die NPA die SAPD beskik nie oor die kennis om hierdie sake te hanteer.Reinstate die "scorpions "
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Added by Fred, 16 May 2013
Our friends in the Chrital Palce next to the N1 and more so Garry must not cry now - do your work, put the emphasis where it belongs. As an industry we want to respect the FSB - we find it extremely difficult. Do something about it.
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Added by Concerned, 16 May 2013
Why did the NPA allow Brown to plead on the two counts, why was the evidence and witnessed presented by the NPA in argument on sentencing , not produced in the trial. The judge in his written judgement alludes to the fact that if he had been aware of the evidence presented by the NPA in sentencing , he may not have allowed the plea agreement. If the FSB is so outraged by the sentence, why did they not ensure that the NPA proceeded on all the counts against Brown, surely they and the curators should have been able to produce the evidence to convict Brown on the other counts. Or is these another agenda at work and could it be that there are other parties who are complicit and do not want their involvement to come out in a detailed and lengthly trial. Just a thought mind you.
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Added by old timer, 16 May 2013
This is not an isolated case of poor judgement being handed down.The criminal always seems to have more rights than the victim.One has to wonder whether these judges have any real experience of life or is their limited view of the world confined to law books and court rooms. If so, the justice system is at the mercy of childlike mentality's with high IQ's!
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Added by C Venter, 16 May 2013
Ek wonder hoe die ombudsman die makelaars hanteer wat geld by Fidentia belê het. Te oordeel aan vorige beslissings sal hulle sekerlik nie so lig daarvan afkom nie.
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Added by Paul, 16 May 2013
This is the worst sentence I've seen in many years in the industry. How on earth can this be? To admitt to the crime, get a fine and walk OUT OF IT and get away with all those people's money......NO!!! this is out. What message does it send to my clients and investors for many tears
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