The Financial Sector Conduct Authority (FSCA) has withdrawn the licence of accounting and financial services company Stringfellow Financial Services (Stringfellow Investments Specialists).
This comes after the FSCA’s investigations into the company revealed that its founder, Thomas Stringfellow, operated an illegal investment scheme and misappropriated client funds between 1 May 2013 and 30 June 2019.
In a statement issued on Wednesday, it indicated that it has imposed an administrative penalty of R20 million on Stringfellow Financial Services and R15 million on the Stringfellow Group.
“The FSCA has also disbarred Mr Thomas Stringfellow for a period of 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.”
The financial conduct regulator says Stringfellow and his company Stringfellow Financial Services contravened section 7(1)(a) and 13(3) of the Financial Advisory and Intermediary Services Act 37 of 2022 (FAIS Act). It adds that Stringfellow and his company also contravened 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 2003 and section 11 of the Banks Act, 94 of 1990.
“Stringfellow Group contravened section 7(1)(a) of the FAIS Act and section 11 of the Banks Act.”
The FSCA notes that while Stringfellow Financial Services, Stringfellow Group and Stringfellow himself were invited to make submissions to the FSCA regarding the administrative sanctions, they opted not to do so.
The FSCA initially provisionally withdrew Stringfellow Financial Services’ licence in 2019 while investigating allegations of misappropriated investments of more than R100 million in client funds and incorrect financial advice given by the company.
Read: FSCA withdraws Stringfellow Financial Services’ licence
In a statement issued in July 2019, it said: “Mr Stringfellow allegedly raised funds from his clients to invest in the women’s sportswear business, Leigh LJ (Pty) Ltd (which trades as Lorna Jane), where he serves as its MD. This investment scheme offered his clients a return of 14% per annum.”
“Some clients opted to receive monthly returns and did receive their money until the scheme collapsed in June 2019. Other clients opted not to receive monthly returns but to invest the money for a specific period with the option to withdraw the money and interest at the end of the period.”
Stringfellow was arrested on 11 July 2019 and charged with one count of fraud by the South African Police Service (SAPS). He was released on bail but rearrested in February 2021, when he failed to appear in court.
Stringfellow charged with fraud (July 2019)
Thomas Stringfellow arrested – again (Feb 2021)
Following the recent developments, the FSCA says it has opened a criminal case with the Directorate for Priority Crime Investigation with SAPS.
Nondumiso Lehutso is a Moneyweb intern.