Faith wrongly given

Fidentia all over again. How do these skelms get away with it for so long?

From this report, it looks as though the FSB is not worth anything.
 
With a CFD, one party agrees to pay another the difference between the opening and closing price of a stock without owning it.
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LOL! You might as well take your R30m and play a bit of three-card-monte! I have no sympathy with those suckered by this.
 
well, this is the one whose luck ran out. the others, sadly, are still roaming the streets freely, until - of course - their luck runs out. funny how they hardly ever get caught...
 
"more than Vox’s R43m profit at its half-year stage."

...and who says Telkom is the only greedy Telecommunication's company out there....
 
I agree with the FSB thing...they do try, but its not nearly good enough.

ic said:
o how did Dealstream manage to withdraw money from these trust accounts?
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The problem is, that the money isn't just sitting in the trust accounts and chilling. Its more of a trading account actually. Its being used to trade...and that causes a lot of activity on the account. The company holding the accounts (Investec) can't distinguish between Dealstream moving money for legitimate reasons and Dealstream moving money without client authorization.

There is a autobiography called rogue trader about a similar collapse. (Barings Bank & Nick leeson).:eek::cool: Film too.
 
ic said:
Ok, I hear what you're saying about these accounts being more like trading accounts than actual trust accounts, but who actually has power of attorney or normal signing power on these accounts, and who is responsible for monitoring the activity in these accounts?
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When dealing with any broker, they are supposed to keep any funds you hold in a trust account, they have direct access to this account in order to trade with the funds in it on your behalf.

Effectively dealstream had complete control of the funds as any broker would have, Dealstream broke the trust with the client by using the money for purposes other than the clients immediate trade activity. = fraud.

Personally I choose brokers very very carefully and I trust my current broker that I've been with for the better part of 10 years, I moved from my previous one MST aka Tradek aka Tsec, when they listed and soon afterward de-listed and made plenty of cash for the business as they de-listed at a far lower share price. Even though all transactions were above board, I viewed the delisting as a business practice not in the best interests of investors, if they did that to their own investors I assumed they'd have no qualms doing it to client money and pulled my account.

D
 
rwenzori said:
LOL! You might as well take your R30m and play a bit of three-card-monte! I have no sympathy with those suckered by this.
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Although, correct me if I'm wrong, but if you make a crooked 'deal with a mate in a pub' as it's put - it's possible no-one on the decision making side lost out. Then the culprit/s fled. I'd love to ask Greg Blank about this kind of thing...
 
Investec investor relations head Ursula Nobrega says: “Dealstream deposited client money with us and we didn’t see what the individual clients were trading. It’s normal for money to run down in trading accounts anyway, and nothing happened to arouse our suspicions.”
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Investec are a fine and dandy bunch to comment like this- the cheek of it when they themselves are dodgy.
 
A sorry tale!

Dealstream: As the FSB saw it
Oct 8 2008 12:51PM
Marc Ashton

Johannesburg - On Tuesday the Financial Services Board (FSB) released a report into the events leading up to the collapse of the failed derivatives trader Dealstream Securities which may leave more questions than answers.

The report shows a two-year sequence of events, which appears to have culminated in private and institutional clients being left sorely out of pocket.

* January 2006: The JSE meets Dealstream MD Russell Leigh and complains that he is misrepresenting contract for difference (CFD) instruments, and that Dealstream was incorrectly representing its instruments as regulated by the JSE. The JSE requests Leigh to change the wording on the Dealstream website.
* January 23 2006: Another letter is sent from the JSE legal representatives regarding the above.
* February 28 2006: A further letter is sent from the JSE legal team.
* March 17 2006: Another letter from the JSE is sent to Leigh.
* July 11 2008: The FSB receives a complaint from a Dealstream client about an unusual request from Dealstream for a "lump sum" transfer into their trading account.
* August 6 2008: The FSB contacts Leigh by letter regarding the above complaint, and the registrar instructs Dealstream to stop selling CFDs until the firm is properly administered.
* August 12 2008: Leigh responds to the FSB, saying that Dealstream is a registered member of the JSE broking exchange and every transaction it makes is through the regulated single stock futures market.
* September 2 2008: Dealstream fails to meet a margin call from Rand Merchant Bank (RMB). This trend continues for three weeks before RMB calls in the margin on the Dealstream account, after news that Leigh has fled and the company has collapsed.
* September 18 2008: The JSE receives a complaint regarding Dealstream from client G Alpino, who says that funds that were supposed to be in the Investec trust account have been removed. Leigh responds, telling the JSE that it was a normal course of business and the funds were held in a pooled client account.
* September 19 2008: According to interviewed Dealstream employees, Leigh instructed them to make excuses for reasons why trades could not be executed and there were insufficient funds in their accounts.
* September 19 2008: The registrar of Securities Services and Financial Services Providers instructs Dawood Seedat to conduct an investigation into the affairs of Dealstream.
* September 22 2008: The JSE sends a member of its surveillance department to the Dealstream premises, who finds them locked up.
* September 23 2008: Seedat and his team arrive at Dealstream's Melrose Arch offices. They seize documents and meet Dealstream staff. Non-executive director Saul Cohen (who works for investor Argil, and is also an employee of auditing firm Ernst and Young) arrives at the Dealstream offices, and informs Seedat that Leigh has fled the country and has no intention of returning.
* October 6 2008: The FSB releases its report into Dealstream, and confirms that in its two-year trading history the business has never produced a set of audited financials.

- Fin24
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"Dodgy" would be an understatement!
 
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