The Financial Sector Conduct Authority (FSCA) has withdrawn the license of Stringfellow Financial Services, trading as Stringfellow Investment Specialists, imposed an administrative penalty of R20 million on the company and one of R15 million on the Stringfellow Group. The FSCA has also debarred its director, Thomas Stringfellow, for 20 years from providing, or being involved in the provision of, financial products or financial services; acting as a key person of a financial institution; and providing any services to a financial institution, whether under outsourcing arrangements or otherwise.
This follows an investigation by the FSCA which revealed that, from May 1 2013 to June 30 2019, Stringfellow, acting through Stringfellow Financial Services and Stringfellow Group, operated an illegal investment scheme and misappropriated clients’ funds. Stringfellow also contravened section 7(1)(a) and 13(3) of the Financial Advisory and Intermediary Services Act (FAIS Act), section 2, 3(1)(a)(i), 3(1)(d), 8(1) (a) to (d) and 11 of the General Code of Conduct for Authorised Financial Services Providers and Representatives as well as section 11 of the Banks Act. The Stringfellow Group contravened section 7(1)(a) of the FAIS Act and section 11 of the Banks Act.
Although Stringfellow Financial Services, Stringfellow Group and Stringfellow were invited to make submissions to the FSCA regarding the intended sanctions, they elected not to do so.
The authority has also imposed an administrative penalty of R100 000 on a key individual, Sathish Bhala, and debarred him for eight years, following his submissions to the authority. The investigation revealed that, from February 2016 to April 2018, while Bhala was key individual of Stringfellow Financial Services, he caused and/or permitted the contraventions of the acts listed above and failed to meet the fit and proper requirements, contravening sections 4(1)(a), 7(1), 8(1), 12(a), 12(c) and 42(1) of the Determination of Fit and Proper Requirements for Financial Services Providers, 2017, and Part VIII of the Determination of Fit and Proper Requirements for Financial Services Providers, 2008, read with sections 8(1A)(c) and 8A of the FAIS Act.
Copies of the debarment and penalty orders are available on the FSCA website.