The government of the Republic of Mauritius has recently July 2007 amended three Acts of parliament:-
- Financial Services Act
- Securities Act
- And Insurance Act
in an attempt inter alia to better protect “members of the public investing in non-bank financial products”.
The Mauritian government and its Financial Service Commission have now managed to lock the door long after the Leaderguard horse has bolted. More lamentable however has been their failure to clean up the mess made by the horse. And the mess is substantial. Investors are left entirely without compensation. And this largely because the FSC failed in its duty of care.
In the matter of the Leaderguard Spot Forex the Financial Service Commission (Mauritius)
Failed to undertake due diligence investigations in respect to the character and past financial dealings of the company’s Directors.
Failed to undertake an investigation and thorough examination of Leaderguard accounts – income and expenditures via their operating banks prior to awarding this company a global category one business licence.
Failed to ensure that their (FSC) demand that Leaderguard Spot Forex Directors should close investor accounts and repay investments and that this would be undertaken honestly. FSC (Mauritius) twice believed the validity of the Leaderguard client repayment lists (supplied by Director Stefan Pretorius) which were in fact and significantly in part, fraudulent. (Many investors listed had in fact not been repaid).
Failed to revoke the Leaderguard Spot Forex Licence to trade until some seven months after the collapse of Leaderguard Securities.
What the Financial Services Commission did eventually achieve was the arrest of Leaderguard company Directors on a wide variety of charges (which did not however include fraud!) The Directors were fined some 2 cents in every dollar lost by investors. This is a slap on the wrist if ever there was one.
It is obvious that the FSC Mauritius have a duty of care to past investors who lost funds due to their negligence. Investors deserve an apology. They also deserve the support of FSC in their attempt to seek compensation of their losses from both auditors and trustees through the Mauritian court. How else can they live down their failings.
Friday, February 22, 2008
THE FINANCIAL SERVICES COMMISSION IN MAURITIUS: DUTY OF CARE
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