31 May AtoZForex, Vilnius — The biggest lender of unsecured loans in South Africa, Capitec shuts Ponzi MMM linked accounts. The CEO of Capitec Gerrie Fourie affirmed that over 2000 MMM bank accounts closed in order to safeguard the bank’s customers. Capitec was monitoring MMM transactions before shutting down the accounts linked to the Ponzi scheme.
Ponzi schemes are considered to be illegal in many countries due to the fake advertisements that are behind them. Only a few people make money and there is no such thing as free money. Exponential returns through a scheme may sound too good to be true and that is probably because it is!
Quick Action From SARB
Gerrie Fourie has been critical about the South African Reserve Bank’s (SARB) delayed intervention after having been informed in advance about MMM’s activities. Fourie indicated customer safety as paramount and that the regulators should react instantaneously to prevent the customer from being disadvantaged. Capitec reported on MMM and only received a response from the regulators 4 to 5 months later, which could be a little too late in most fraudulent situations.
Move Towards Proactivity
Recently at the Supervision Department’s annual report, SARB indicated its efforts in shifting towards proactivity in terms of intervention and notification of illegal activities before it is too late to safeguard customer funds from vanishing. SARB was investigating a total of 19 schemes this year. The bank affirmed its concern towards illegal schemes and how individuals get caught up in them. They advised caution and watchfulness to anybody making any investment decisions.
Unfortunately, most schemes and illegal activities are only reported when the money invested is unable to be retrieved. In such circumstances, the chances of regaining lost funds are drastically low due to the stage the scheme has reached.
MMM’s Reaction To Account Freeze
Having MMM bank accounts closed, a member of the MMM-RSA, Deon Janse van Rensburg had an application filed in the month of April at the North Gauteng High Court. In this application, Rensburg opposed the commissioner of the South Africa Police Service, The National Prosecuting Authority and the commissioner of the National Consumer Commission.
The intentions behind filing the report were to have MMM declared legitimate and clear any links to characteristics such as the Ponzi scheme or any other illegal schemes.
See also: SA MMM members panic after MMM collapse
The court papers filed by Mr. Janse van Rensburg indicate his view on how the accounts had been frozen on the basis that they were receiving funds from an alleged Ponzi Scheme while also mentioning that those involved were not able to handle their financial obligations due to frozen bank accounts. He further mentioned that all this had concluded with no concrete evidence of any contempt of law or regulations but merely based on media influences.
MMM investigated by Hawks
Hawks – The Directorate for Priority Crime Investigation confirmed in April that an investigation of MMM relating to any breach in the law’s of South Africa was its priority. Following a preliminary review of the scheme in 2015 by the NCC, the investigation had now moved from the digital forensic laboratory and cyber crime division to the Commercial Crime Unit.
“The preliminary inquiry was opened following the NCC complaint and while the investigation is still at an early stage, we view this matter in a serious light,” claimed Brigadier Hangwani Mulaudzi, a spokesperson for the Hawks.
MMM has been confirmed as a nonmember of both the Financial Services Board as well as the National Stokvel Association.
Think we missed something? Let us know down in the comments section.