Tuesday, 31 May 2016
Last updated 3 days ago
Sep 5 2012 | 9:31am ET
A New Zealand-based financial adviser has apologized to clients after steering them into what appears to be a massive South African hedge fund fraud.
On Aug. 23, nearly a month after the murder-suicide that preceded the alleged fraud's revelation, Simon Morton told clients that he was leaving the business after determining he'd never win their trust again.
"I have done my utmost to give clients the best service possible and to provide the best advice I could," he wrote. "It seems though that this one fund choice has had a dramatic effect on the lives of so many. For this I am deeply sorry, as it was never my intention and I am struggling to find a way to digest this myself."
That "one fund choice" was Abante Holdings' Relative Value Arbitrage, which authorities believe to be at the center of a 3 billion rand Ponzi scheme. Its manager, Herman Pretorius, killed a business associate on July 26 before turning the gun on himself.
Morton also steered clients to other investment ventures that Pretorius participated in, including SA Superalloys and Wesizwe Platinum. Both of those companies involved Julian Williams, the man Pretorious shot in Cape Town.
Morton, who has received death threats, told clients that he had turned their accounts over to Galileo Capital.
"We feel we have a compelling service to offer these unfortunate clients as we operate in a fundamentally different manner to those advisers who placed clients in Abante and therefore we hope we can help people recover in the years ahead," Galileo's Warren Ingram told Moneyweb. Ingram said that he would be in Cape Town to meet with Morton's clients this week.