Concerns around Jacobus Stephanus Geldenhuis have once again surfaced, as the Financial Sector Conduct Authority (FSCA) released a statement on Tuesday alerting the public to his continued, unauthorised financial dealings.
FSCA confirms disbarred Jacobus Stephanus Geldenhuis still operates as FSP
The financial watchdog has renewed its warning about Geldenhuis and Classic Financial Services, citing severe breaches of financial legislation.
“The FSCA found that Mr Geldenhuis and Classic Financial Services contravened section 7(1) of the Financial Advisory and Intermediary Services Act No 37 of 2002 and conducted the business of a bank in contravention of section 11 of the Banks Act No. 94 of 1990. Neither Classic Financial Services nor Mr Geldenhuis are authorised FSPs or a representative of an authorised FSP.
“During the investigation, it was established that Mr Geldenhuis did not invest client funds in shares but was operating a Ponzi-scheme and used client funds for his own benefit,” the FSCA wrote in a statement.
Geldenhuis, who was previously stripped of his authority to provide financial services for 20 years, coupled with an administrative penalty of R143 million, appears to have sidestepped this significant setback.
“It has been brought to the attention of the FSCA that, despite Mr Geldehuis’ debarment, he is still rendering financial services to members of the public. Mr Geldenhuis now appears to be conducting business under the name Pecunia Systems (Pty) Ltd, (Pecunia), with FSP number 11332,” the financial watchdog revealed.
This action has not only misled the public but also tarnished the reputation of Pecunia Systems, which has vehemently denied any association with Geldenhuis and taken steps to distance itself by requesting the lapse of its FSP license—a process still under the FSCA’s scrutiny.
“The FSCA is in the process of considering Pecunia’s application.”
The Financial Sector Conduct Authority
Jacobus Stephanus Geldenhuis’s Alleged Ponzi Scheme Exposed
The unravelling of Geldenhuis’s alleged Ponzi scheme is a tale of meticulous investigation and collaboration.
On 12 October 2022, a strategic operation led by the FSCA, alongside the Financial Intelligence Centre (FIC) and the Asset Forfeiture Unit (AFU), descended on Classic Financial Services One (Pty) Ltd’s business premises in Kempton Park, Gauteng, to execute a search and seizure warrant.
This was not just a routine inspection but a decisive move to clamp down on the suspected financial fraud following complaints that Geldenhuis was masquerading as an investment in shares advisor, a ruse to divert client funds for his personal gain.
Directives issued by the FIC to freeze bank accounts and the successful application by the AFU for preservation orders came after the search and seizure operation recovered around R19 million of investor funds.
A deeper dive into Geldenhuis’s shoddy business exposed a classic Ponzi scheme: Geldenhuis and Classic Financial Services not only misled investors but also blatantly contravened financial laws, operating without the requisite authorisation.
The FSCA’s rigorous investigation resulted in Geldenhuis facing a 20-year debarment and a staggering R143 million administrative penalty, which, we now know, has not deterred the alleged serial Ponzi schemer.
Precautions to take before entrusting your money with an FSP
Geldenhuis remains at large, with no indication that law enforcement authorities have been roped in to investigate the case further.
In the wake of such revelations, the importance of vigilance cannot be overstated. The FSCA implored the public to conduct thorough checks on the legitimacy of financial service providers.
Through accessible resources like the 0800 110 443 toll-free number and comprehensive online searches, individuals can verify the authorisation status of any entity or person claiming to offer financial services.
This proactive approach is not just about safeguarding investments; it’s a fundamental step towards building a more transparent and trustworthy financial ecosystem.