Presentation to Parliament INTRODUCTION Financial Services Board Gerry Anderson: Deputy Executive responsible for Intermediary Services Dube Tshidi: Executive Officer: Financial Services Board

Definition of a Ponzi A Ponzi scheme is a fraudulent “investment” operation that pays returns to its “investors” from their own money or the money paid by subsequent “investors” rather than from profit earned from the “investments”. Intro the Team -

How “investors” are enticed Ponzi schemes entice “investors” by: offering higher returns than other genuine investments the returns are earned within a short period and are abnormally high “investors” are told that the more they bring new “investors” the higher their returns will be

Who are the likely victims Family members Communities Pensioners Greedy well-off individuals Perpetrators: - very convincing and sly - play on peoples’ emotions

Appearance of product(s) Initially appears genuine (H Pretorius) No transparency Shrouded in secrecy / confidential agreements

Eradicating the schemes Contravention of the Banks Act Investigated by the South African Reserve Bank Consumer awareness Financial literacy at schools Twin Peaks: - “one entry” requirement - Fit and Proper - Publication of reports - Stiff penalties

THANK YOU. QUESTIONS?