Nedbank employee debarred after sending himself 53 emails containing clients' confidential information before resigning

A former Nedbank employee has been debarred from working in the financial sector after he sent himself 53 emails containing clients' confidential information to his personal email account.

Nkamogeleng Phillip Malahlela resigned at the bank in April 2024 and was planning to leave the financial service provider in May after serving his notice.

However, the bank discovered that just before submitting his resignation, he had sent himself 53 emails which contained at least 895 attachments with clients' confidential information.

Upon discovering what he had done, the bank issued him with a cease-and-desist letter instructing him to immediately refrain from any further misappropriation of confidential bank information or property. He was also suspended with immediate effect.

Malahlela fully cooperated during the investigation, and it was confirmed that the confidential information was not shared with anyone outside of Nedbank.

He was subsequently notified of a disciplinary enquiry initiated to investigate allegations of gross misconduct and dishonesty. He was found guilty of misconduct and his employment was immediately terminated.

After the dismissal, he was sent a letter in June 2024 indicating an intention to debar him.

In July 2024, Malahlela submitted representations to the bank explaining why he should not be debarred. In his submissions, he admitted to sending confidential client information to his personal email address and acknowledged that he was prohibited from disseminating the client's information to his personal email.

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According to his explanation, he said he was used to transferring client information between his personal and business email accounts. He claimed that some of the bank's clients sent financial information via WhatsApp, which was linked to his personal email.

He argued that, during his sixteen years of employment at the bank, he had never compromised clients' information.

He asked for leniency due to his long career in the banking industry and the fact that his four children are financially dependent on him.

However, his submissions were unsuccessful, and he was debarred over lack of integrity, incompetence, and dishonesty.

Unhappy with the decision, he sought relief at the Financial Service Tribunal (FST) to overturn the bank's decision.

He argued that the decision-maker failed to conduct a proper investigation into his character, as required for a debarment decision under the Financial Advisory and Intermediary Services (FAIS) Act. He said his cooperation during investigation was overlooked.

Moreover, it was established that the information was not sent to anyone outside the bank and no harm was committed.

In addition, the decision to debar him was premised on internal policies and procedures in circumstances where assessing his character and integrity necessitates its own enquiry. 

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Evaluating the case, the tribunal said the issue was not whether Malahlela intended to disclose the information to third parties or send it to the bank's competitors, but rather whether he can be trusted with sensitive information belonging to his employer and will accurately fulfil the responsibilities and obligations of a Financial Service Provider (FSP).

It was also held that the bank reasonably concluded from the established facts that Malahlela aimed to maintain access to the information post-employment, potentially for personal advantage or for a third party's benefit. This behaviour, on its face, suggests that he was no longer a fit and proper person to serve as an FSP.

"The applicant (Malahlela) intentionally violated his employment contract by transferring sensitive and confidential information to his personal email. He was aware that his employment contract and the bank's policies prohibited him from unauthorised possession of the bank's clients' confidential information.

"He knew or should have known that if this information were to fall into the wrong hands, it could harm the respondent and its clients. Consequently, he breached his fiduciary duty toward the bank," read the judgment.

Even though the information was not distributed, it was said Malahlela's actions demonstrate a disregard for client confidentiality and professional ethics, which are fundamental to maintaining the integrity of the financial services industry.

"Based on the cited cases and established facts, the tribunal is satisfied that the applicant's debarment is justified, and there are no grounds to interfere with that decision."

His application was dismissed.

sinenhlanhla.masilela@iol.co.za

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