Des wrote to City Press after being defrauded by forex trading company Profit Trading, a business that claimed to invest clients’ money into an automated forex trading system.
“I am one of those investors who had taken every little cent I had and invested it with him. I was living off this investment and now that I am not receiving withdrawals, I have since lost my house, my car and a very lucrative logistic deal because of the lack of income,” says Des.
An investigation by City Press found that the company founded by Myles Ndlovu in 2014, had its license revoked by the Financial Services Board (FSB) in September last year after receiving complaints from investors. The FSB told City Press they had handed the case to SAPS for investigation.
Complaints have started on HelloPeter.com with one investor writing “When Profit Trading started a few years ago it managed to fake enough about having automated forex trading software to obtain an FSB license to continue with their operations. Multitudes flocked in with the trust that it has been licensed and constant adverts from radio stations pushed most people to be convinced of its validity. Now Profit Trading has closed its offices in Sandton, no lines are working and its workers have disappeared. People invested millions due to trusting that it is legitimate. It had branches all over the country and I think people have not realised that they are gone.”
|UPDATE: Since publishing this article, I have spoken to Myles Ndlovu who says that he has been the victim of a campaign by bitter ex-employees, and says that investors are actually able to withdraw their funds. However, complaints from investors continue to be received. As at 12 June we have had no confirmation that any payments have resumed|
According to Des, initially investors received 5% to 8% profits monthly, paid into their trading accounts which they could access after giving 21 days’ notice. “I had opened three accounts totaling R350 000 in September 2015. My main account had grown to R650 000 the last time I had access to view the balance and the other two accounts had R80 000 and about R30 000.”
In September 2016 Des noticed that there were delays in receiving withdrawals. “We didn’t think there was an issue at first. Now we have been waiting for our withdrawals since November.” Des has made hundreds of calls to Mr Ndulvo, to no avail. “Initially I was told we would be paid in January, thereafter the promise was March. Ever since then he has ignored calls, emails and texts from everyone including his agents.”
The investigation by the FSB suggests that it could be a classic Ponzi scheme where just enough information is provided to make people believe it is a real opportunity. Initial investors receive returns sufficient to make them believe in the model and to encourage other people to join. What they do not realise is that there is no real investment at all and that the money they initially receive is from new investors.
Elaine Mabiletsa who works as the JSE as a specialist on bonds, currencies and interest-rate derivatives says she is very concerned about the rise of forex platforms in South Africa claiming to make people wealthy overnight. “What investors don’t realise is that forex trading is very high risk and for every winner there is a loser. Not even a bank with all the access to information and research consistently makes money out of trading currency. For someone to pretend they have developed a system that consistently produces profit is impossible. If they had, they wouldn’t be trying to sell courses and software to people, they would be too busy making billions,” says Mabiletsa. The marketing material on the Profit Trading website says that you can invest in a forex “robot” that is accurate 95% of the time, yet Mabiletsa points out that this is impossible, and if it did exist, the banks would certainly be using it. It is more likely that the funds were never invested in the first place.
In an interview on SABC in 2014 talking about the launch of his company, Ndlovu claims to use an “automated system that protects your capital” but at no point in the interview is he able to explain exactly how it does that or give any convincing details about his knowledge of the forex market.
Online research by City Press found that a Profit Trading Bot, an automated forex and binary trading robot, is a scheme that has been marketed elsewhere in the world and appears on many “scam warning” websites.
City Press has tried to contact Profit Trading through the telephone numbers listed but they have been disconnected. We have also tried to reach Myles Ndlovu on his cellphone and via LinkedIn but he had not responded at time of going to print.
This article first appeared in City Press.