Don’t make silly decisions on the stock exchange

​Don't make silly decisions on the stock exchange

By Alicia Pillai



With the petrol price climbing to R17 a litre and news of further increases, consumers are feeling the pinch and are looking for ways to make their money grow, and make it grow fast.  The financial pressure also creates opportunities for scam artists who make promises of turning your money into millions.

Desperation to make more money could cost you more than you know and all consumers, are at risk. The Financial Sector Conduct Authority (FSCA) is seeing an increase in complaints especially against online trading platforms.  This can be seen from the recent media releases and warnings issued by the FSCA, namely; Xchange Share Tracking, Trading (Pty) Ltd & DSB Brokers/DBS Securities Ltd, Bull N Bear Investments (Pty) Ltd, Financial Broking Circle CC, Khasoane IMarkets Trading (Pty) Ltd and Lisema David Khasoane to mention a few.

So how do these scams operate? Behind the fancy logo, impressive website and portfolios printed in full colour and on high gloss paper, many of these companies disguise themselves as legitimate companies.

Below are a few examples of recent scams as reported on by consumers to the FSCA;

Entity 1:
This entity runs seminars in various provinces promoting its business which is alleged to be trading forex on behalf of client. The company makes promises of huge returns on investments. Clients are made to sign investment mandates which varies in periods of investments, for example the investment period can be 3, 6, 9 or even 12 months. In this case however, the investment period (often, incorrectly, called a 'lease period') was three months and at maturity clients were persuaded to roll-over their investments to the next period. There is no actual trading. Old investors are being paid out, new investors money!

Entity 2:

This company offered an online trading platform on which it claimed to be trading on behalf of its clients, but in fact there was no actual trading. The so-called "platform" was a front manipulated by the owner to reflect trading results. Initially a client will invest a small amount and fake reports on trading activities would reflect good returns, sometimes reporting a doubling in the initial amount invested. Clients would then be informed that if they had invested more money, they would have made a better return on their investment. As a result, clients borrowed money and got loans from the bank to increase their investment amount. Hereafter, the "investments trading" would be so bad that clients lose all their money.

 Questions to ask yourself;

  • Have I done my research on the company? Did I get the contact details and physical address and request proof of the companies' registration?
  • Did I check if the company is authorised by the Financial Sector Conduct Authority (FSCA) to conduct business in South Africa and what type of financial business they are registered to trade in?  (Financial products they are authorised to sell?)
  • What product am I investing in?
  • Why am I being secretive about the investment opportunity? Mention the investment to a few people you trust. They might be able to warn you if they have knowledge of such a scam.
  • Are the returns too good to be true? For example doubling your money in 3 months.
  • Do I have copies of all signed documents?
  • Is the company making excuses when I try and validate their legitimacy?
  • Is the company refusing to give me, my returns as promised or committed to?
  • Are the rules of the investment constantly changing?
  • Is the company using the matter of its tax clearance as a delay tactic to pay out my returns?
  • Is the company threatening that they will not release my money if I complain to the media or to the FSCA?

    Remember there is no legal guarantee that you will be reimbursed your investment funds if you invest in an illegitimate company. This is why it is so important to do your research before your invest. We have a duty to society to educate one another about the scams that are currently operating in our communities. What may look good and enticing on the outside is just a promise of riches and could leave you out of pocket! Do not be fooled by the fancy cars or houses, it could just be a trap to lure you in! 

     Contact an authorised financial adviser who will provide you with professional financial investment advice. 

    For how to identify a pyramid scheme from a real investment visit, Resources, Brochures, Pyramid Schemes 

    For more information or to report illegal scams visit or  

    To check if a company is registered to sell you financial products or to find an authorised financial advisor, contact the Financial Sector Conduct Authority;

    41 Matroosberg Road, Riverwalk Office Park, Block B, Ashlea Gardens, Pretoria


    Tel:  012 428 8000

    Share call: 0800 20 20 87/ 0800 20 3122(FSCA)


Report scams anonymously to Whistle-blower's

Email: or

Toll-free: 0800 31 36 26

Fax: 086 522 2722