From CompliNEWS | Financial Service Intelligence Watch
Financial Services Tribunal decision on Sharlene Palad-Kana
The Financial Services Tribunal recently handled Case No: FSP69/2023 involving Sharlene Palad-Kana (Applicant) and Outsurance Insurance Company Limited (Respondent). The Tribunal, chaired by MG Mashaba SC with members N K Nxumalo and P Moloto-Stofile, heard the case on 7 June 2024 and delivered the decision on 25 June 2024.
Background
Sharlene Palad-Kana was employed by Outsurance as a Commercial Insurance Agent from 1 March 2019. Her remuneration was performance-based, with an initial guaranteed retainer of R29 019,58 per month for the first four months, subject to adjustment based on performance.
Incident
In September 2023, an internal compliance audit revealed that Palad-Kana had submitted fictitious policy applications to justify a higher retainer. Further investigation uncovered that she had defrauded a client of approximately R270 000 by substituting her own bank account details on an Outsurance document, thereby redirecting premium payments to herself.
Disciplinary Actions
Palad-Kana was suspended and resigned on 27 September 2023. Despite her resignation, she was issued with a termination agreement and was invited to make representations regarding her debarment. In her submission on 4 October 2023, she admitted the severity of her actions, attributing them to mental, physical, and financial stress.
Debarment
Outsurance debarred Palad-Kana on 6 October 2023 for dishonesty and failure to follow standard operating procedures. Palad-Kana contested the debarment, claiming procedural unfairness as she was notified of the decision before being allowed to make representations. She sought reconsideration based solely on procedural grounds, not disputing the findings of misconduct.
Tribunal Decision
The Tribunal found that Palad-Kana’s actions demonstrated a lack of honesty and integrity, rendering her unfit to comply with the fit and proper requirements. Her procedural fairness argument was dismissed, and the application for reconsideration was denied.
Conclusion
The Tribunal upheld the decision to debar Sharlene Palad-Kana, reinforcing the importance of honesty and integrity in the financial services industry. The case underscores the rigorous standards expected of representatives and the severe consequences of fraudulent behaviour.