The decision of the Registrar of Financial Services Providers to withdraw the licences of Dynamic Wealth Management (Pty) Ltd and Dynamic Wealth Stockbrokers (Pty) Ltd was vindicated when the Appeal Board on 18 June 2011 dismissed with costs an appeal by the two entities against the Registrar’s decision.
That means that with immediate effect the two companies in the Dynamic Wealth Group will no longer be authorised to do business as financial services providers.
The Appeal Board also upheld the Registrar’s terms to the licence withdrawal which were imposed in the interest of Dynamic Wealth investors. These terms read as follows:
(a) Dynamic Wealth Management (Pty) Ltd / Dynamic Wealth Stockbrokers (Pty) Ltd (DWM/DWS) must immediately inform all their clients and product suppliers that their licenses have been withdrawn. The Registrar must be copied with the said correspondence forthwith.
(b) DWM/DWS are prohibited from conducting any business or accepting any new business as envisaged by the Financial Advisory and Intermediary Services Act, 2002, with immediate effect.
(c) DWM/DWS must return all uninvested funds received from clients without any delay.
(d) Where DWM or DWS is holding scrip, participating interests, investment vouchers or any other form of proof of investment which belongs to clients, this must be accounted for fully and returned to the persons entitled thereto.
(e) Where appropriate, the companies are required, after consulting their clients and product suppliers involved, to take reasonable steps to ensure that any outstanding business is transferred to another financial services provider in the best interest of clients.
(f) The Registrar must be kept informed of progress with the above unwinding process, and in case of doubt his further instructions must be sought.
(g) In the case of Specialist Income Limited (SIL), the former investors in the Dynamic Wealth income portfolios (who now find themselves locked in as shareholders of SIL) are to be regarded as investors in DWM. Those directors of SIL who have no interest in the Dynamic Wealth Group are invited to make an appointment to meet with the Registrar.
(h) The approved auditors of DWM and DWS must, at the cost of the latter companies, oversee the above process and report progress, any problems or delays to the Registrar.
Individual investors who require legal assistance are advised to consult their advisers or seek redress through the office of the FAIS Ombud as the FSB is not equipped to assist with individual civil claims against financial institutions or former institutions.
Apart from supervising the winding down of Dynamic Wealth’s remaining business, the FSB will continue to pursue appropriate regulatory action having regard to the disastrous consequences and losses caused to investors
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