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Last week, David Wilmot was arrested for stealing R23m from his clients under the excuse that he would trade with this money on their behalf. For that, the PE Forex trader was sentenced to 15 years in prison by the Financial Sector Conduct Authority (FSCA).
The story can become a prominent example of how important it is to check the reliability of the trader (either a person or an entity) and entrust your money to regulated Forex brokers in South Africa that were registered with FSCA directly to provide financial advisory and other intermediary services before starting trading in South Africa, or elsewhere.
The Port Elizabeth Commercial Crime Court pleaded Wilmot, 47, guilty for 153 counts of fraud, a count of breaching the Exchange Control Act, a count of the Financial Advisory and Intermediary Services Act violation, and one count of money laundering.
The investigation of this case started back in 2013 when a regulator began looking into Wilmot’s company’s, Nava Shore Holdings (or also known as Novashore), operations. It was found out that D. Wilmot was taking money from his clientele and saying that he will trade on their behalf with this money.
He managed to get R32.2 million from 48 private investors over the period from January 2010 to June 2015. The agreement between him and investors was made based on a fixed-term loan. However, only R2.4 million was transferred to overseas Forex trading accounts. So, about 90% of this money was pocketed by Wilmot himself.
FSCA representatives commented: “The remaining R20.8 million was used to fund Wilmot’s extravagant lifestyle, all while he reassured investors that their money was safe and increasing in value, and when prompted, produced fake documents as proof.”
As some sources state, most of the stolen money was spent on paying for his kids’ private schools, and his wife’s new car.
Lots of people were affected by this act, including an elderly woman who lost her money and became one of the unfortunate victims of the scam. In October 2013, Wilmot agreed with his former client, Jonathan Fowke. Wilmot promised that he will retrieve Fowke’s lost funds by trading with new investments. Fowke invested about R1 million and lost the money.
In the court, Wilmot confessed that when investors were asking any questions about their money, he was showing them fake papers saying that money is secure and is generating a profit on Forex.
After all, accusations were settled and a court decision was put in place, Wilmot’s company was shut down by the decision of investors in June 2015.
FSCA proclaimed: “There are instances where persons are registered to provide basic advisory services for a low-risk product and then offer the services of a far more complex and risky nature.”