ACM Gold’s license suspension, the Pyramid Pastor and Seized Assets – LeapRate Exclusive

LeapRate Exclusive…. Sometimes real life is more interesting than even the best written script. And it is hard to get more interesting than this.

LeapRate has learned that the current regulatory troubles being experienced by one of South Africa’s leading retail forex brokers, ACM Gold, stem from the aggressive activity of its largest introducing broker, Platinum Forex.

Certainly something we’ve seen before – an aggressive IB comes up with a supposed can’t-miss method to make money trading Forex for its clients, which it then markets to unsophisticated investors. And then things don’t turn out as planned.

However this story comes with a twist.

Colin DavidsThe IB in this case, Platinum Forex, is owned and run by a very popular South African Pastor, Colin Davids (pictured at right), dubbed the ‘Pyramid’ Pastor by the Sunday Times of South Africa. The charismatic Davids, who has recently written a book entitled The Anti-Grace Gospel and whose wife Charlyn is apparently set to launch a gospel album, is reported to have used his popularity both among his followers and on social media to tout his Forex trading business. And to have used his clients’ money to finance his own very lavish lifestyle.

Running his Forex business, which brought promises of large returns to its investors, did succeed in bringing a lot of wealth to Davids. In late July South Africa’s Asset Forfeiture Unit (AFU) seized goods worth a reported R138 million (more than USD $10 million) from Davids on suspicion he is running a pyramid scheme.

Among the goods seized were two upmarket homes in Plattekloof and Hermanus, bank accounts and up to seven cars – including three top-of-the-range BMWs, two Jaguars, a Range Rover and a Volvo.

Not bad for a humble Pastor.

The following are two examples of posts on Platinum Forex’s Facebook page:

Platinum Forex Facebook post 1 Platinum Forex Facebook post 2

A prosecution spokesperson stated:

Davids [allegedly] used some of the investors’ funds to pay for two immovable properties, in Plattekloof and Hermanus, motor vehicles for his wife, Charlyn Anthea Davids … and household expenses from retail stores such as Woolworths, Checkers and Pick n Pay. These assets are regarded as proceeds of unlawful activities.

So how does this involve ACM Gold?

The problem for ACM is that Davids was acting as an introducing broker to ACM and was a large part of their business – leading regulators to focus on ACM while it continued to investigate Davids. Most of the funds collected from investors by Davids were at least initially deposited at ACM Gold, as we understand it in the range of $10 million.

ACM Gold license withdrawnIn early August, about a week after Davids’ assets were seized, the FSB changed ACM’s license status to ‘provisionally withdrawn’ – allowing it to remain operating with existing clients during the investigation, but not to take on new clients.

A source close to the situation informed us that during the FSB’s investigation over the past few weeks it was discovered that ACM Gold held a Category 1 ‘Intermediary’ FSB license. However ACM was engaging in activity which would have required a Category 2 ‘Discretionary’ FSB license – such as directing the investing of client funds and providing of investing advice, including sending out morning briefs of technical analysis.

And ACM’s chances of having its license quickly reinstated may have taken another blow this week, as we earlier reported that another IB of the company, Go Direct Stock Market Investments (GDSMI), was issued a warning by the FSB after clients complained that money has never been paid back, and that they have not received promised returns on their investments.

An ACM Gold spokesperson had the following to say about the situation:

We do not provide advisory services to clients. The morning brief you have mentioned is not owned by ACM Gold – coming from a third party ’The Gold Apprentice’. The disclaimer states that it is a ‘guideline to interpreting the fundamentals’ and that the information should only be used by investors who are aware of the risks inherent in forex and commodities trading. The ACM Gold & Forex Trading team, while able to share news of the day, do not offer trading advice. We also do not trade on behalf of anyone.

For his part, Mr. Davids has remained defiant. The following are excerpts of posts made on his personal Facebook page:

July 24I would like to vehemently deny all allegations that have been leveled against me and my company Platinum Forex Group. I further want to reiterate that all allegations are baseless and unsubstantiated… I am co-operating with the authorities and…I have nothing to hide… it will become patently clear that my business is in fact a legitimate enterprise, and not a pyramid scheme as has been alleged.

July 28 – Good News from our legal council… because our successful trading company can turn R3 million into R30 million in 30 days and benefit others by it, we are accused of running a Ponzi/pyramid scheme. Because we exposed banking manipulation of trading we are the target and victims of investigation, misinformation and brutal character assassination.

August 7 – Today our Auditors and Accounting firm proved from source records, bank records and trade statements that Platinum Forex Group trades profitably, that we are not a Ponzi scheme, that none of our clients lost money, that all our funds are safe with our bankers and brokers. That we have so much money that we should be a bank. We are very close to put this challenging episode behind us

And on the Platinum Forex company Facebook page the following message:

August 25Dear Client: It has been almost a month that we have now been legally engaged in opposing the defamatory allegations brought against our company… Our affidavit proves that the court was misled by inaccurate information and based its decisions on that inaccurate and misleading information. Further it also proves our legitimacy and profitability of our trading business.

We will continue to follow this story as it develops.

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