The law firm represents individuals who've lost significant amounts on the Banxso platform. Around 227 people claim they have lost R298m. Picture: Banxso website
The controversial contracts-for-difference (CFD) platform Banxso has gone on the offensive against Mostert & Bosman, the law firm leading a liquidation application against it, alleging that the law firm is not acting in the best interest of its clients.
In response, Mostert & Bosman vehemently denied the allegations and stated that Banxso lied and that its statement “was riddled with incorrect and/or misleading statements”.
The law firm’s clients are individuals who have lost significant amounts on the Banxso platform after being deceived by fake ads featuring celebrity billionaires marketing automated investment products offering unrealistic and exorbitant returns on nominal investments of around R4 800. The source of the ads remains unknown.
Banxso has denied any links to the fake ads and maintains that people who lost money on its platform did so due to their trading decisions.
Mostert & Bosman launched the liquidation application in August last year and represented an elderly lady who lost R500 000 of her savings in her dealings with Banxso after responding to one of the fake ads.
The law firm then launched a website to allow other individuals who lost money to register as creditors to be part of the application.
Around 227 people have registered, claiming they have lost R298 million.
Banxso is defending the application, which will be heard in the Western Cape High Court on 17 March.
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Banxso attacks Mostert & Bosman
Banxso launched an attack on Mostert & Bosman in a press release issued in response to a warning from the Financial Sector Conduct Authority (FSCA). The FSCA had cautioned the public about a scam that fraudulently targets Banxso clients by offering refunds for losses allegedly incurred due to Banxso.
Banxso’s attack on Mostert & Bosman seems to take the legal process to the media and alleges that the parties driving the liquidation proceedings only do so for financial gain and do not act in the best interest of their clients.
Mostert & Bosman vehemently denied this, stating that Banxso’s assertions are based on blatant lies. “We record that the document is riddled with incorrect and/or misleading statements, not based on any objective facts, but rather on wild speculation and conjecture.”
Read Banxso’s statement here, and Mostert & Bosman’s response here.
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Banxso’s attack on the law firm includes various allegations. The most notable is that it alleges that Mostert & Bosman’s website was insecure and that it may have been the target of a hack, placing the personal information of its clients in the hands of the “refund” scammers.
In response, Mostert & Bosman vehemently denied any breach and stated that the site is highly secure and hasn’t been breached or hacked. “Quite contrary to the Banxso release, the site is actually very well secured and subject to regular penetration testing,” Craig Pedersen, the website operator, is quoted as saying.
Moneyweb did its own investigation into Banxso’s claims by engaging its database of victims.
Of the 40 people who claimed the scammers contacted them, 24 said they never registered on the liquidation website or were phoned before the site’s launch. Their information could therefore not have been compromised by the website.
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Banxso also questioned the “interconnected nature of the parties” involved in the liquidation application, stating that they are also involved with the liquidation of Mirror Trading International (MTI), one of the largest South African Ponzi schemes ever. The liquidation is also one of the largest ever.
Banxso states that Pedersen, as a forensic investigator, and Pierre du Toit of Mostert & Bosman, the lawyer pursuing the Banxso liquidation, were involved in the MTI liquidation.
It added that Herman Bester and Riaan van Rooyen, MTI’s liquidators who are seeking to be Banxso’s liquidators, appointed Du Toit as legal counsel.
Banxso even highlights the amounts of money the parties earned from MTI’s liquidation and alleges that “mounting evidence suggests the prolonged proceedings may serve interests beyond client protection”.
Mostert & Bosman dismissed the claims, stating that the parties have worked on many liquidations, including MTI. “All the parties referred to are compensated in terms of either statutory prescribed tariff, alternatively agreed fees in terms of Service Level Agreements, which are overseen by the Master of the High Court and available for public scrutiny.”
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Banxso also referred to the R57 million its directors offered to “guarantee” the repayment of the applicants “if they withdrew their application and could prove their claims”.
Banxso claimed Mostert and Bosman rejected the offer. “It must be emphasised that these funds were separate from those frozen in the Banxso accounts and represented a clear attempt to resolve unnecessary and misguided litigation. This rejection raises significant questions about the true motivations driving this litigation,” the statement reads.
In response, Mostert & Bosman said it “is blatantly incorrect and disingenuous” for Banxso to claim the guarantee would ensure 100% repayment to the applications.
“If Banxso wanted to resolve the issues with our clients, it could simply have arranged for the payment of their claims and not [made] the meaningless offer.
“The offer to provide security does not assist any of our clients, as they will still be required to individually institute a High Court action against Banxso to obtain a court judgment for their claims. The legal costs of each action will be more than R1 million, and, considering that an unsuccessful party will most probably utilise his/her right to appeal, each action will take between three to five years.
“The offer does not assist any of our clients in any manner whatsoever.”
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Banxso accused the law firm of freezing the funds in its bank accounts.
“Currently, Mostert and Bosman, with the FSCA’s approval, maintain a freeze on client funds despite a previous court order directing that funds were to be released to a third-party FSP [Financial Services Provider] that would facilitate the withdrawal of funds to Banxso clients. This arrangement was intended to protect our customers’ financial positions while we resolve the necessary matters to have our licence restored and trading resumed.
“However, when seeking a postponement of their own matter from December 2024 to March 2025, Mostert & Bosman, with the clear blessing of the FSCA, chose to request that the frozen funds remain such until the outcome of their application is heard.
“This continued freeze serves no apparent purpose other than prolonging proceedings and securing a bounty for their unpaid fees should they succeed in their application,” the Banxso statement reads.
Mostert & Bosman responded that Banxso’s statements are factually incorrect, stating that the court order stipulated that funds may only be transferred to another FSP’s bank account to migrate clients to the service provider.
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“It clearly merely authorised the transfer of clients’ funds for a specific purpose, meaning the money could not be withdrawn for the benefit of Banxso clients.”
The law firm added that Banxso has “syphoned off” R1 billion of Banxso’s clients’ funds to its offshore liquidity providers, which Banxso’s owner, Harel Sekler, also owns.
Mostert & Bosman also denied it sought a postponement of the liquidation application. “The correct facts are that Banxso indicated that they required an opportunity to respond to the last set of affidavits filed on behalf of our clients. This request was deemed to be reasonable, considering the available time left before the hearing date in December. The parties, therefore, agreed that the matter should be postponed.
“However, as our clients had a well-founded fear that the remaining funds would not be preserved and be dissipated by the time that the matter is finally heard, Mostert & Bosman insisted, as a condition to the postponement, that Banxso agrees to a court order in terms of which the funds are further preserved. This is clearly to the benefit of all victims/creditors of Banxso.”
This article was republished from Moneyweb. Read the original here.
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