Secondary

Pudding-Proof

The proof of the pudding…

A recent finding by the FSB Appeal Board drew attention to the need for honesty and integrity in all circumstances.

The Registrar debarred the appellant on 14 September 2015.

Timeline

On 8 June 2015 the Registrar issued a notice of intent to suspend the appellant’s licence to act as an FSP on grounds, inter alia, that he had failed to successfully complete the relevant first level regulatory examinations by the due date.

On 10 June 2015 the appellant’s compliance officer submitted a certificate purportedly confirming that he had successfully completed the relevant regulatory examinations for key individuals, the so-called “RE 1” on 23 April 2012 through the Financial Planning Institute of South Africa (“the FPI”).

Such a qualification would have been captured automatically on the FSB’s system. The fact that it was not, led to the “…inescapable conclusion that no such qualification was at any stage earned by the appellant.”

The Registrar also established that the appellant unsuccessfully attempted such examinations on two occasions after 23 April 2012 with Moonstone.

The authenticity of the “RE 1” certificate put up by the appellant in support of the contention that he was appropriately qualified was also verified with FPI who refuted its authenticity via a sworn affidavit.

Accordingly, the licence was withdrawn on 14 September on account of a failure to fulfil the competency requirements for such a licence.

The Material Facts

It is common cause that the appellant:

  • wrote the “RE 5” examinations which he passed on 23 April 2012;
  • received a certificate from FPI indicating that he had passed “RE 1” in circumstances where, in truth and in fact, he had neither written nor passed any examination entitling him to such a qualification with FPI;
  • submitted such a certificate to the Registrar relying thereupon for his representation that he had successfully completed an “RE 1” qualification on 23 April 2012; and
  • subsequently wrote the “RE 1” certification examinations under the aegis of Moonstone and failed the said examinations.

The registrar based her decision on an affidavit from the FPI which stated that “…the FPI would not have issued such a certificate as FPI records reflected that the candidate never registered to complete the RE 1 key individual exam. He only completed the RE 5 representative exam.

Ironically, both certificates were dated 23 April 2012.

In response to the affidavit, the Appellant’s counsel held that the Registrar ought to have undertaken a forensic investigation.

The Appeal Board states, in this regard:

Quite what that forensic investigation would have yielded, remains obscure. This obscurity results, in part, from appellant’s concession that he at no stage whatsoever undertook and passed the “RE 1” examination under the auspices of FPI. We therefore find that this basis for criticism of the Registrar’s decision is anything but meritorious.

Surely the appellant ought, as a reasonable FSP possessed of the requisite honesty and integrity attributes befitting of an FSP, to have appreciated that his actions fly in the face of the very fundamental honesty and integrity attributes required of every FSP.

In this latter regard his counsel sought to lay emphasis on the fact that the certificate was issued as a result of an administrative error, as if to suggest that the appellant had not made himself guilty of the crime of fraud and/ or forgery. That, in our view, does not assist the appellant.

His submission to the Registrar of the erroneously issued certificate as proof that he is appropriately qualified in circumstances where he reasonably ought to have known that he was not so qualified is extremely unsatisfactory. It is difficult to arrive at a conclusion other than that he misrepresented the true facts in order to obtain a licence to act as an FSP.

Appeal Board Decision

The appeal was dismissed with costs.

It will be interesting to see whether the Registrar will take up the appellant’s suggestion and conduct a forensic investigation of the submitted certificate. At best, this may remove the “obscurity” referred to by the Appeal Board.

We are not aware of one RE certificate being published incorrectly in the nearly six years that we have been involved in the regulatory exams.

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