THE alleged mastermind of South Africas biggest Ponzi scheme, Barry Tannenbaum, may still be hiding out in Runaway Bay, Australia, but it has not taken long for another large-scale financial fraud to hit investors. <\/p>\n
This time South Africas third-largest life insurer, Liberty, has been caught up in the wide net, although on May 6 it will have an opportunity to show in court why it should not be held liable for the apparent fraud committed by one of its major former franchises. <\/p>\n
The result should hinge on how far the Financial Advisory and Intermediary Services Act (FAIS) implemented in 2004 goes in protecting victims, as Liberty alleges the victims knew that certain products sold by its franchise at the time, SFS, were not Liberty products. <\/p>\n
However, Business Day has established that the 10 plaintiffs taking on the insurance giant, believe they were duped, as the Liberty licence number, logos and letterheads were used and Liberty had for three years not set up an effective monitoring system as required by the act. <\/p>\n
A source close to proceedings believes claims could be as high as R140m, as SFS was Libertys second-biggest franchise. <\/p>\n
Victims range from widows and pensioners, some of whom lost entire investments, to small firms and a paraplegic society. <\/p>\n
The main complaint in the summons is that Liberty failed to comply with its obligations under the act, which Liberty denies. <\/p>\n
The court case relates to the conduct prior to 2007 of Anton de Beer, now believed to be a water salesman, and the late Wayne Harris, who according to reports committed suicide after the fraud was revealed. <\/p>\n
These former representatives, from before the new act was passed, of Liberty and the company were involved in property transactions which Liberty says were \"unconnected with Liberty\" and whose clients \"were aware of these facts\". <\/p>\n
\"Liberty and its legal representatives are continuing to defend this matter,\" said Julian Cloete, divisional director of group legal services at Liberty. <\/p>\n
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Read more:<\/p>\n
Liberty to deny being part of franchises fraud<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" THE alleged mastermind of South Africas biggest Ponzi scheme, Barry Tannenbaum, may still be hiding out in Runaway Bay, Australia, but it has not taken long for another large-scale financial fraud to hit investors. This time South Africas third-largest life insurer, Liberty, has been caught up in the wide net, although on May 6 it will have an opportunity to show in court why it should not be held liable for the apparent fraud committed by one of its major former franchises. The result should hinge on how far the Financial Advisory and Intermediary Services Act (FAIS) implemented in 2004 goes in protecting victims, as Liberty alleges the victims knew that certain products sold by its franchise at the time, SFS, were not Liberty products. Continue reading