The R30 000 share-trading software that cannot trade

A South African operation selling purported share-trading software for about R30 000 displays the hallmarks of a deliberately constructed fraud, according to forensic investigator Paul O’Sullivan.

After examining contracts, software and information supplied by complainants, O’Sullivan said the offering appeared designed to persuade financially vulnerable consumers that they could earn additional income by trading shares.

“There’s no doubt that it’s fraud. Not only is it fraud, it’s carefully planned.”

Paul O’Sullivan, forensic investigator

The companies and individuals implicated in the complaints were not identified in the interview. The allegations have also not yet been tested in court.

However, several characteristics described by O’Sullivan bear a striking resemblance to businesses investigated by Moneyweb between 2015 and 2019. Those investigations documented complaints against a succession of companies selling Optimal Market Systems, an expensive share-analysis package promoted to consumers as a way to make money on the stock market.

A company that allegedly does not exist

O’Sullivan said one of the most serious warning signs was a contract apparently issued in the name of a company that did not exist. He also identified what he described as the repeated use of different legal entities. When one company attracted complaints on consumer websites or appeared in the media, he alleged, the operators would establish another company and continue selling the same product.

“They create a new company and start again, using the same documentation, the same software – everything about it.”

This alleged pattern echoes Moneyweb’s earlier reporting on companies including Cursu Taurorum, Tenacity Capital, VDM Capital, Pro Equity Management, Aeromax Trading, Voltic Direct and Quantico Trading. Moneyweb previously reported that these entities were linked through common owners, staff or premises and sold the same underlying software. The National Consumer Commission subsequently said it was preparing action over alleged contraventions of the Consumer Protection Act.

It has not been established from the interview alone whether the latest complaints concern the same people or companies.

Analysis tool sold as a route to trading

O’Sullivan said the product he examined was not a trading platform.

“Their sales pitch tells you that you can trade on the stock market. You cannot.”

He described it instead as a predictive or analytical program apparently drawing on a database extending back to 1985. Some of the educational material supplied with it appeared to date from 2009 and was allegedly copied from copyrighted sources without attribution.

Moneyweb reached a similar conclusion when it examined Optimal Market Systems in 2015. The package provided technical and fundamental analysis and included a simulation, but did not itself allow customers to execute trades on the JSE. Customers nevertheless alleged that salespeople promoted it as a means of achieving substantial returns. Some reported being promised returns of 40% in six months.

The JSE warns that legitimate trading takes place through an authorised JSE member or broker. It has also cautioned consumers about fraudulent applications offering automated trading or guaranteed returns.

Salespeople “sent in for the kill”

According to O’Sullivan, the sales process appeared carefully scripted to manipulate prospective customers. He said experienced salespeople could potentially face criminal liability if they knowingly continued promoting the product despite the complaints and warnings available in the public domain.

Former salespeople previously interviewed by Moneyweb described how they had been trained to sell Optimal Market Systems. Two later said they realised that they had misled customers and caused them to part with hundreds of thousands of rands.

In the latest case, O’Sullivan identified several alleged warning signs for sales staff: they did not give customers direct contact numbers, had no further contact with customers after a sale, and passed all subsequent communication to so-called technicians. The technicians allegedly used remote-access software such as TeamViewer to work on customers’ computers.

Although remote-access tools have legitimate uses, granting access to an unknown operator creates serious risks. Depending on the permissions provided, someone could access information, install unwanted software or remove files.

The R30 000 enforcement gap

O’Sullivan believes the price may have been deliberately selected because individual victims would struggle to pursue civil litigation. A consumer who loses R30 000 could spend substantially more than that instructing attorneys and issuing summons, making individual recovery economically irrational.

Victims may then encounter another obstacle when reporting the matter to police: the existence of a signed contract can make the dispute appear civil rather than criminal. O’Sullivan disputes that characterisation.

“The thing has been designed in such a fashion that it looks like a civil claim. It’s not a civil claim. It’s fraud.”

He said he had assisted in bringing several complainants together so that the allegations could be presented as a coordinated matter to the Directorate for Priority Crime Investigation, better known as the Hawks, and a prosecutor in Pretoria. In his view, investigators should examine the entire operation rather than treating each R30 000 complaint as an isolated contractual dispute.

He alleged that, if the evidence supports the pattern described, the people controlling the companies and knowingly facilitating the operation could face investigation for fraud and potentially racketeering. No announcement of a formal investigation, arrest or prosecution was provided with the interview.

The allegations emerging from the latest complaints suggest that an old sales model may still be finding new victims – and possibly new company names.