COMMUNIQUE OF THE FINANCIAL SERVICES COMMISION
The Financial Services Commission has on Friday 25th March 2005 suspended the Category 1 Global Business Licence of Leaderguard Spot Forex Limited with immediate effect on receiving information that the company has been rendered insolvent as a result of substantial trading losses. Measures have been taken to protect the remaining assets of the Company in the interests of its investing clients and creditors, pending a full investigation into the circumstances of the loss.
Leaderguard Spot Forex was licensed as an asset management company and was using its sister company, Leaderguard Securities (Pty), as marketing arm to develop a wide clientele base in Southern Africa primarily through a network of investment consultants and brokers. Leaderguard Securities has filed for liquidation on 23th March 2005 in South Africa.
In suspending the licence, the Commission has issued directions to the Company preventing it from undertaking new business activity. It may only operate those trading positions that are still pending so that the best interests of clients are protected. The Company has been ordered to submit all its decisions to the oversight of its independent director. Signatory authorities of executive directors are also subject to the concurrence of the independent director.
In addition, in order to further protect clients and creditors, the Company has been directed to apply by not later than 1st April 2005 to the Supreme Court in Mauritius for the appointment of either a Liquidator or a Receiver-Manager. Any director who fails to comply with the directions of the FSC commits a criminal offence under the Financial Services Development Act, and is liable on conviction to imprisonment.
The Commission has been informed that the Company is seeking to work out a compromise with the investing clients and creditors.
The Commission will continue to probe into the matter and liaise with its counterpart, the Financial Services Board of South Africa, and any other regulatory authority that might have an interest.
Financial Services Commission
30th March 2005