Cases heard by the Appeal Board of the FSB often provide more stringent legal certainty to matters in the financial services industry, particularly in so far as decisions by the FSB itself and the FAIS Ombud are concerned.
We commented before on some cases where the grounds for appeal border on the absurd, seasoned by a strong helping of arrogance. The latest case sets new standards in this regard.
The Registrar’s decision
On 28 April 2017, the FSB debarred the appellant from rendering financial services for a period of five years, based on the following grounds:
1. The appellant no longer met the requirements contemplated in section 8 of the FAIS Act with reference to character qualities of honesty and integrity; and
2. contravened sections 2 and 3(1)(d) of the General Code of Conduct
This stemmed from the fact that the appellant submitted fictitious and/or fraudulent Discovery HIV and Pathology Screening Request Forms for purposes of undergoing blood tests in respect of policy applications for his clients. These forms were found to be fictitious and/or fraudulent in that the appellant’s clients’ signatures appearing thereon were forged.
The appellant colluded with an employee and former employee of Lancet to identify other patients with favourable blood screening results and to swop the appellant’s clients’ blood samples with extra samples of these other patients.
The appellant’s case
1. The Registrar could not rely on the handwriting examination reports of Discovery’s expert (Mr Van Vuuren) to substantiate the appellant’s disbarment as van Vuuren’s expertise was not established;
2. No reliance could be placed on the evidence of the two Lancet’s employees implicating the appellant due to their contradictory evidence. According to the appellant, it could well have been that they ran a scam on their own;
3. The Registrar failed to follow due process and her actions were one sided and biased and lacked objectivity;
4. Lastly, should the Appeal Board find that the Registrar was justified to debar the appellant, the debarment period was too harsh.
The Appeal Board findings
“The appellant was in the course of the protracted investigation confronted with many allegations, confirmed by affidavits, concerning his misconduct. The appellant chose, through his former attorneys of record, to avoid the issues, attack the messenger and the character of the some of the witnesses and to raise contrived procedural issues. The obvious stratagem was to delay the day of reckoning. What is glaringly absent is the appellant’s version of the facts.” (This reminds me of someone else who shall remain nameless – editor)
“This immediately puts to rest the third point, which was that the Registrar should have allowed the appellant to cross-examine the witnesses. There were no bona fide factual disputes.”
“There is, however, one exception and that relates to the first point, the expertise of van Vuuren. The point can be dismissed on a very simple ground. It is common cause that the signatures of all the witnesses, who had been clients of the appellant, in relation to their blood tests were forged. They not only said so, but so did the expert who examined their signatures on behalf of the appellant.”
“The only dispute between the handwriting witnesses was whether it could be established that the appellant himself had forged the signatures. The Registrar, in her reasons, chose to accept the appellant’s expert evidence and not that of van Vuuren. In other words, the expertise of van Vuuren is irrelevant.”
“Nevertheless, that does not affect the general conclusion that the appellant caused the signatures to be forged. He was the only person to benefit from the forgery. On his argument, his clients chose to forge their own signatures — a ridiculous contention, which also puts to rest the second point. The Registrar was very conscious of the fact that she was dealing with accessories to the fraud and approached the evidence with the necessary suspicion but found more than enough objective corroboration for their version.”
“It was not and could not be argued that the Registrar misdirected herself or failed to exercise her discretion properly. In the light of the elaborate and massive scale of the fraud, a much longer period could have been justified.”
The appeal was dismissed with costs, which are to be taxed in terms of the Uniform Rules of Court.
Given the Appeal Board’s view on “…of the elaborate and massive scale of the fraud…”, one has to wonder whether the matter ends here, or whether criminal charges are to be/have been laid against the appellant.