- The Financial Sector Conduct Authority (FSCA) imposed a R1 million administrative penalty on MZP Markets and banned its director, Mosiuoa Zachariah Palime, for 15 years.
- The business took in R1.1 million from 24 clients through unlicensed foreign exchange and contracts for difference trading and left R799,450 unpaid.
- The Financial Services Tribunal dismissed Palime’s challenge and found no reason to interfere with either sanction.
An investment operator who promised clients extraordinary returns from foreign exchange trading has failed to overturn a R1 million administrative penalty imposed on his company and a 15-year debarment by the Financial Sector Conduct Authority.
The Financial Services Tribunal found that Mosiuoa Zachariah Palime and MZP Markets (Pty) Ltd conducted financial services business without the required authorisation, leaving clients with R799,450 in outstanding funds. It ruled that the sanctions were justified by the seriousneass of the misconduct and the need to protect the public.
Investment scheme promised extraordinary returns
The matter arose from an application under Section 230 of the Financial Sector Regulation Act for reconsideration of the FSCA’s decision of 26 March 2026.
Palime, the sole director and shareholder of MZP Markets, did not challenge the finding that he and the company contravened section 7(1) of the Financial Advisory and Intermediary Services Act by providing financial services without authorisation. His challenge was directed at the sanctions.
MZP Markets was incorporated in May 2017 and operated under different names before adopting its current name in April 2020. Neither Palime nor the company had ever been authorised as a financial services provider or appointed as a representative of one.
Between September 2017 and September 2019, they solicited money from members of the public to trade in foreign exchange and contracts for difference (CFDs) on their behalf. Clients signed powers of attorney authorising Palime to trade their funds, which were deposited directly into the company’s bank account.
The company advertised on Facebook and its website that an investment of $1,000 would generate a return of $1 million within 36 months, to be shared equally between the client and the company. An FSCA official subsequently informed Palime that the advertisement was false and misleading, instructing him to remove it and refund client deposits.
According to figures provided by Palime, the company collected R1,102,177 from 24 clients but refunded approximately R302,727 to only 10 of them. The outstanding amount was R799,450.
Among those affected was a client, Seleso, who invested R50,000 under a document titled Full Discretionary FSP Mandate. When the company informed him in September 2019 that it could no longer trade on his behalf, he requested a refund but was never repaid.
Another client, Ntlabati, invested R95,000 and requested a withdrawal of R150,000 but received only R16,000. Investigators who examined the company’s bank statements concluded that client funds were not invested in legitimate financial instruments and that payments made to some clients were funded by deposits from others.
FSCA imposes financial penalty and 15-year debarment
The FSCA issued a public warning about Palime and MZP Markets on 20 September 2019 before launching an investigation in July 2020.
Following its investigation, the regulator found that the pair had provided financial advice and intermediary services relating to foreign currency-denominated investment instruments without a Category I licence. It also found that they had acted as discretionary financial services providers without a Category II licence.
In September 2025, the FSCA notified Palime of its intention to impose a R1.5 million administrative penalty, jointly and severally against him and the company, and to debar him for 15 years.
Palime responded by accepting responsibility for the contraventions. He said the company had stopped operating, that he intended to reimburse clients from future earnings and that he was unemployed. He requested that the penalty be reduced to zero and that the debarment be limited to five years or less.
The FSCA subsequently reduced the proposed penalty by R500,000 to R1 million and imposed it on MZP Markets alone, rather than holding Palime personally liable. It nevertheless maintained the 15-year debarment, finding that the seriousness of the conduct justified the period and that it was necessary to protect market integrity.
The debarment prevents Palime from providing financial products or services, acting as a key person of a financial institution or providing services to a financial institution.
Palime challenges the sanctions
In his reconsideration application, Palime argued that the combined sanctions were excessive and duplicated each other. He also relied on his unemployment, cooperation with the investigation, admission of wrongdoing and intention to repay the outstanding client funds.
He proposed repaying between 20% and 30% of his income once he secured employment. At the hearing on 30 September 2026, his principal argument concerned the time taken by the FSCA to finalise the matter.
He argued that the misconduct ended in September 2019, but the regulator only made its decision in March 2026, more than six years later. He contended that the delay should have been considered when determining the debarment period, either by reducing it or treating some of the elapsed time as having already been served.
The FSCA opposed the application, arguing that it had considered the relevant statutory factors and Palime’s personal circumstances. It also maintained that the debarment operated from the date it was served and that the legislation provided separate procedures for applying to reduce a debarment or remit an administrative penalty.
Tribunal finds no grounds to interfere
The Tribunal, chaired by Judge MF Legodi, with O Tongoane and PR Long as members, emphasised that its role was not to decide whether it would have imposed a lighter sanction, but whether the FSCA’s decision fell outside the range of sanctions reasonably available to the regulator.
On the administrative penalty, the Tribunal found that the FSCA had considered the seriousness and duration of the misconduct, the harm to clients, the financial benefit derived and Palime’s cooperation. It noted that the R1 million penalty was lower than the R1,102,177 the FSCA found had been derived from the unlawful conduct.
The Tribunal also rejected the argument that the sanctions duplicated each other, explaining that the administrative penalty served a deterrent purpose while the debarment protected the public. It further found that Palime’s personal unemployment did not affect the company’s liability for the penalty, which had been imposed on MZP Markets alone.
Regarding the debarment, the Tribunal found that Palime had taken public money under discretionary mandates without a licence, promoted a misleading investment scheme, failed to honour withdrawals and left clients R799,450 out of pocket.
It said, “A 15-year debarment is severe, but it is not outside the range of sanctions reasonably open to the FSCA on these facts.”
Six-year delay does not justify reducing debarment
The Tribunal acknowledged that approximately six and a half years had passed between the end of the misconduct and the FSCA’s decision. It said investigations of this nature should be finalised promptly in the interests of both the public and the person under investigation.
However, it found that the delay did not invalidate the debarment or require its reduction. The Tribunal noted that Palime had not raised the delay in his submissions to the FSCA or included it among his written grounds for reconsideration.
It also explained that a debarment operates prospectively and takes effect when served, or on a later date specified in the order. The legislation did not provide for it to be backdated to the date of the misconduct. The Tribunal further found that Palime had not demonstrated any prejudice arising from the delay, particularly because he admitted the contraventions and did not claim that the passage of time had impaired his ability to answer the allegations.
Importantly, the Tribunal noted that the outstanding client funds remained unpaid more than six years after the misconduct ended. It said, “Time has not lessened the seriousness of the conduct. It has prolonged the clients’ loss.”
The Tribunal also pointed out that Palime could approach the FSCA under Section 153(6) of the Financial Sector Regulation Act to seek a reduction or revocation of his debarment. Such an application would allow the regulator to consider his rehabilitation, subsequent conduct, actual repayments and the time that had elapsed.
An application under Section 173 could also be made to seek the remission of all or part of the administrative penalty.
Reconsideration application dismissed
The Tribunal concluded that Palime had failed to demonstrate that the FSCA acted on incorrect principles, exercised its discretion capriciously or failed to consider the relevant factors.
It dismissed the reconsideration application, leaving the R1 million administrative penalty against MZP Markets and Palime’s 15-year debarment in place.
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