Mirror Trading International’s offices in South Africa have been raided by the Financial Sector Conduct Authority.
Additionally the residences of Clynton and Cheri Marks have also been raided.
The raids across Stellenbosch, Polokwane and Durban saw the FSCA seize ‘electronic and telephonic records from cell phones, notebooks, and PCs’.
The FSCA conducted the raids after securing warrants from high courts in the relevant jurisdictions.
The FSCA is South Africa’s equivalent of the SEC. Among other things, the FSCA oversees securities regulation across the country.
Being a civil agency, they do not have the power to make arrests. Whether Mirror Trading International and the Marks (right) are the subject of a criminal investigation is unclear.
Beyond issuing a securities fraud warning against MTI in August, the FSCA hasn’t revealed the extent of its investigation.
The FSCA explained that its next step is to examine the evidence and compare it with other information that it has obtained.
“On conclusion, we will make decisions involving whether we should take administrative steps against any person and or refer the evidence obtained to other bodies.”
In their securities fraud warning, the FSCA stated;
We are reviewing the information as it becomes available and will involve the South African Police Service if the discrepancies are confirmed.
The FSCA has previously claimed ‘the returns on the investments claimed by MTI seems far-fetched and unrealistic.’
BehindMLM reviewed Mirror Trading International in October 2019. Based on its business model, we concluded it was a Ponzi scheme.
A data leak last month confirmed as much, revealing the company, at the time, was running on an $80.2 million USD deficit. That is, if everyone in MTI withdrew their funds, MTI would come up $80.2 million short.
MTI maintains it is able to provide returns of up to 10% via a trading bot. When challenged on why it opted not to register with the FSCA and operate legally then, the company claimed the law doesn’t apply to it.
Cheri Marks is on the record parroting this sentiment. Marks, who we know as Cheri Ward, one of the architects behind the collapsed BTC Global Ponzi scheme, is believed to be involved in MTI’s day-to-day operations.
MTI CEO Johann Steynberg has yet to issue a public statement. As regulators close in on MTI and the Marks, Steynberg is coming off more and more like a puppet.
A voice message shared by Marks reveals her dismissing regulatory action against MTI as “attacks”.
The FSCA pitched up at our house with fifteen policeman this morning.
Really, is this how nervous we are? But anyway, pitched up at my house with fifteen policeman, while I was having breakfast with my friend and my children.
And proceeded to take all of our laptops, our phones and personal belongings and documentation (that) had no bearing on any investigation that they might have.
According to Marks, the seizure warrants were secured on the basis that MTI had failed to prove trading revenue was being used to pay withdrawals.
Based on her remarks, Marks fails to understand that videos of random trades, or even live trades, are not a substitute for audited financial reports.
Marks also disputes FX Choice claiming MTI engaged in no significant trading activity. This is based on “bitcoin transfers”.
In early August FX Choice revealed MTI conducted
just a few trading operations, which were performed manually, large and incurred substantial losses.
At the time MTI was claiming their monthly returns were possible because of trading through FX Choice.
After FX Choice terminated MTI’s account, the company rebooted itself as a crypto bot trading scheme.
Based on Marks’ frustration, the FSCA appear to have confirmed MTI wasn’t generating external revenue through FX Choice.
Marks claims the FSCA lied to the High Court to secure its seizure warrants.
They’re going to find proof of trade, which we’ve already given them, and they’re going to find proof of bitcoin balances, which we’ve already given them as well.
This whole situation does not stop anything. We still trade. We’re still gonna make sure that everyone gets their profit today. Withdrawals will still be processed later today.
So literally, this means nothing.
Whether Marks was aware that MTI’s offices had also been raided at the time of recording is unclear.
In response the FSCA raids, MTI issued the following vague statement:
From here it seems pretty straight-forward. The FSCA should have enough data to confirm that trading revenue is not being used to pay affiliate withdrawals.
If MTI has provided them with current data on affiliate backoffice balances, they should also be able to confirm MTI’s operating deficit (inevitable in all Ponzi schemes).
Stay tuned for updates as the FSCA’s case continues.