Came said the worrying trend emerging from this is that participation in the scheme had increasingly been linked to
the unsecured borrowing market, where some investors could even have used their overdrafts to 'invest' in the
scheme.
Another worry is the level of financial literacy of investors, judging from the posts on Facebook and Twitter. 'It is
difficult for the ordinary person to pick up a pyramid or Ponzi scheme, but financial intermediaries are equipped to do
so.
'And extra protection for the investor is that the intermediary can be held liable for inappropriate advice and be
referred to the ombud,' said Came.
Defencex's website redirects to an internet page called recycle4dollars which introduces visitors to Emotional Freedom
Techniques (Meridian tapping).
Further browsing of the site brings up a Financial Opportunity which outlines how Defencex works and the navigation
button Getting Started instructs investors how to deposit money.
The contact email is a gmail address.
[Picture]
Instructions on how to deposit money into the scheme. (Defencex website)
Defencex punts itself as an online investment company that allows you to 'grow your profits by learning to compound
your daily profits'.
It goes on to encourage clients to 'invest their money for cashflow as opposed to invest for capital gains. Cashflow
investing is the best because you enjoy your account returns for a lifetime,' the company says.
Although the Defencex website is still there, members have vented their frustration that they cannot enter the
Member login.
'Guys what is hapening with defencex website I cnt login,' (sic) one member said on Facebook.
'does anybody have any new info on what is happening on Defecex. Can't even get into the website,' (sic) another
said.
However, many investors still back Walker and when he asked for it at Saturday's meeting, support was clearly
granted.
Moneyweb reported that Walker said he is going through a difficult time. 'I need to know that I have your support,'
which was clearly granted, according to the Moneyweb report.
Almost 4 000 people also signed an online petition backing Walker.
Meanwhile, the SA Reserve Bank has asked auditors PwC to investigate whether Defencex, Cycle4Dollars, Net
Income Solutions and its director Chris Walker are contravening the Banks Act, Moneyweb reported.
According to affidavits, large sums of money were deposited into the accounts of Net Income Solutions, none of which
were reinvested by Walker.
According to Moneyweb, Walker, 46, is no stranger to controversy. His previous scheme, Gold Charity Fund
Investments, was reportedly declared an unfair business practice back in 2002.
Walker was accused of operating a pyramid scheme which abused the name and image of former president Nelson
Mandela.
Came warned South Africans against get richquick schemes.
Page 223 of [2016] 3 All SA 193 (GJ)
'Warning signs that you are dealing with a Ponzi scheme are that the promised returns offered are way over those
achieved in bank deposits, unit trusts and other regulated savings and investment products,' said Came."
[90] Fin24 took very little quantity from Moneyweb 6. It reproduced the headline, but used the word "boss"
instead of "mastermind". The first three paragraphs, and two paragraphs towards the end, of Fin24 6, are
also copied from Moneyweb 6. The remainder of a fairly long and detailed article is not taken from
Moneyweb 6.
[91] But what about the quality of what was taken? It is correct, as Moneyweb says, that the headline and
introductory paragraphs of an article are important to retain the reader's interest in reading the article to
completion. However, in my view, it does not follow, without more, that the headline and introductory
paragraphs of Moneyweb 6 represent, qualitatively, a substantial part of the article.
[92] The essence of Moneyweb 6 is an undercover report of a closed meeting during which an elusive character
addresses his supporters. The article is devoted to a detailed account of what transpired at the meeting. The
detail is central to the article, capturing the atmosphere of the meeting. By contrast, Fin24 6 contains very
little detail of the meeting and is barely descriptive. In my view, Fin24 has not reproduced a substantial part of
Moneyweb 6.
"Defencex boss opens up to Moneyweb"
[93] I shall refer to this article as Fin24 7. It was published on 4 July 2013 at 1:33pm, more than three days after
Moneyweb 7. The article is set out below, with those parts underlined that are sourced from Moneyweb 7:38
"Defencex boss opens up to Moneyweb
Johannesburg 'I'm not going to win against the Reserve Bank that is impossible.'