The Financial Services Board (FSB) has warned consumers not to do business with an online foreign exchange and share-trading company, NaxaInvest.
The company, which claims on its website to be based in Polokwane, offers investors a return of two percent a day – but not over weekends and public holidays. This would provide the astronomical return of at least 500 percent a year.
NaxaInvest says the profit of 10 percent a week is added to investments or paid out every Friday. The minimum investment required is R250, with a minimum investment period of 90 days.
On its website the company says that, on April 25, its “lawyer advised us not to accept any more deposits. Investments currently in the system will still earn until 90 days is over and will then be paid out.”
Two days earlier the company said it would not accept investments from new investors, but existing investors could add to their investments, and it encouraged investors to reinvest their returns rather than take the cash.
The FSB warning comes despite the company saying that FSB inspectors visited the company on April 11 and claiming “it all went well. Inspectors were very impressed with our system.”
The FSB denies that any such inspection took place. It also denies a claim made by NaxaInvest on March 15 on its website that the company had lodged an application for registration with the FSB.
The only contact details on the company website are two email addresses. There are no details on who owns or manages the company, or the skills of the people managing the money invested.
In a media release this week, the FSB says: “NaxaInvest is not authorised as a financial services provider and is not a representative of an authorised financial services provider.”
It says NaxaInvest is contravening the Financial Advisory and Intermediary Services Act by not being a registered financial services provider or a respresentative of a provider.
If convicted, the people involved could face a heavy fine or period of imprisonment.
The FSB says that if you want to do business with a financial services provider, you should check beforehand whether the provider is authorised to render financial services – either on the FSB’s toll-free number (0800110 443) or its website, www.fsb.co.za
* In another matter, the FSB Enforcement Committee has fined Pretoria-based Martindale Securities and Investments R20 000 for contravening the general code of conduct for financial services providers because it failed to adopt, maintain and implement a conflict of interest management policy and did not have risk management or business continuity plans in place.