The Financial Services Tribunal (FST) has set aside the debarment of a bank employee, saying the possibility or suspicion of the transgression was not a sufficient reason for him to be debarred.
The tribunal provided the following context to the matter:
- First National Bank conducts investigations into instances of employees who provide account information to criminal syndicates, enabling them to withdraw funds.
- During an investigation, the FNB’s inspectors established that the applicant, “NM”, had accessed the account of a client, Ms AC, in November 2020 without following a prescribed verification process. He did this by using a Gold cheque card number, which meant he either had the card or he was provided with the card number.
- NM did not know that FNB suspected that Ms AC had been using the account for fraudulent purposes. The account was blocked and under surveillance, but this information would not appear on his computer screen.
- FNB became aware of the NM’s action in February 2021.
Three different explanations
According to the FST, when FNB asked NM to explain his actions, he said he could not remember and gave two possible reasons:
- The client could have been in the bank and required quick service, which he provided by short-cutting the process; or
- He had received a large item report, which would have “entitled” him to access the account.
NM offered to contact the client, but the inspector would not allow it, because the client was the main suspect and contacting her would, presumably, have alerted her.
The tribunal said NM’s first guess could not be checked, because no CCTV record was available for that day.
It said his second guess was “off the mark”, because there was no report at the time, and these reports were sent only to the client’s branch.
During the debarment process, NM offered another hypothesis: the client might have left the card at the ATM, and he looked up her particulars in order to contact her. The debarment committee did not believe this possibility could be true, but it did not check whether the card was used at that branch on the day.
A possibility is insufficient
The FST said if NM had breached the confidence of a client by sharing the client’s information, that would be prima facie evidence that he was not fit and proper, which could have provided a reason for his debarment.
The question was whether, on the probabilities, he did so.
“The fact that he possibly did so is insufficient. A suspicion is also not good enough.”
The tribunal said the only probabilities on which the debarment committee relied were that it did not accept NM’s hypotheses as to why he might have accessed the account.
“It is not a case that he gave inconsistent reasons for having done so. His case was that he could not recall – and then guessed.”
The FST said the probabilities that NM accessed the account on behalf of the client or on behalf of a third person were balanced.
There was no attempt to access the account after the breach. The client probably suspected that the account was blocked, and she would not have tried to access the account.
If the purpose of the information was to enable a third party to access the account, that did not happen. There was nothing to suggest that an unauthorised person had been in possession of the card’s particulars.
As the FST has noted in other section 14 debarment matters, it said although the bank could discipline or dismiss the representative for breaching its rules and regulations, that did not mean he breached the FAIS Act in a material manner.
What about dishonesty?
The FST said although NM was not charged with dishonesty, this aspect came into play in light of the different reasons he offered for accessing the account.
It said NM’s version that he could not remember why he accessed the account was “improbable”.
The FST then asked whether that constituted sufficient grounds for NM to be branded as “dishonest”.
The tribunal answered its own question by stating that the FST has said before that “a single act of dishonesty, negligence, incompetence or mismanagement may not by itself constitute prima facie evidence or absence of honesty and integrity. Such dishonesty, negligence or incompetence or mismanagement must be sufficiently serious to impugn the honesty and integrity of the person concerned.”
It said NM “did not cross that threshold”.
