Stock Market Direct - breaking news

I’ve had some concerns about Stock Market Direct in the past. I’ve been concerned about what it is that they actually are. Their web site says they are “an educational institution which provides information on how to invest directly, actively and successfully in the Johannesburg Securities Exchange”. However the information they offer appears to be just material you can get yourself from legitimate services in South Africa such as Share Data and Profile Group.

They also say that they market “an advanced software product that integrates fundamental analysis as well as technical analysis, news, tips and recommendations to enable the investor to trade with the same kind of information that professional fund managers have at their disposal.” However it also seems that this is just a web-based account with a South African broker that they help you set up. So far, nothing actually useful for the large amount of money you need to obtain their services.

There were more concerns that were more practical. Their web site says that the company “has been operating for several years with offices in Johannesburg, Mbabane, Maseru, Windhoek, and now Gaborone.”

That’s strange because I couldn’t find any trace of the company in any of these countries except here in Botswana. There’s certainly no such company registered under that name in South Africa. While they have a South African web site that just links to their SA information sources. Even the phone number they have on the South African web page is that of Profile Group. They simply don’t exist in SA, despite their claims.

Despite all this it was a surprise when a few weeks ago a customer of Stock Market Direct came to us with a suspicious story. He claimed that at one of their presentations he decided to take their offer but rather than accepting a cheque made payable to the company one of the presenters asked him to pay P7,000 cash directly into her personal account. Curious, don’t you think?

My first thought was that this was perhaps simple fraud. Then I thought it was perhaps a way of avoiding paying tax on the money. Then I started digging. I called both the presenter who took the money and a senior manager at SMD who I have previously met and that’s when some more information emerged.

It seems, and I haven’t been able to find anyone yet who can contradict this, that their “Director” has done a runner. Some of his colleagues at Stock Market Direct had long suspected that he had been “involved in things that were not procedural”. As a result the company split with some of them remaining in the office and the other group operating from the back room of the Director’s house. Operating without a bank account which is why they needed people to pay them in cash with no questions asked.

I was later told that this Director is now wanted by the Police and Interpol were trying to trace him because he has been “taking money from people”. I’ve tried repeatedly to speak to this Director by phone, SMS and email but he doesn’t seem interested in getting in touch. I wonder why?

Meanwhile the group who remain at the office at least claim to have a bank account and an office.

If you are a customer of Stock Market Direct I would check with them urgently. If you are thinking of becoming a customer I’d buy some running shoes if I were you.

History
We warned consumers about dealing with Stock Market Direct as long ago as December last year.  See here, here, here, here, here, here and here.