An appeal brought by Willem Daniel Jonker against his debarment by the Registrar of Financial Services Providers has been dismissed by the Financial Services Board's Appeal Board.
Jonker, who was the sole key individual of Interneuron, was debarred in April last year, because he no longer met the fit and proper requirements in terms of the Financial Advisory and Intermediary Services Act (FAIS Act). The regulator says Jonker contravened various provisions of the General Code of Conduct for authorised financial services providers (FSPs) and the Financial Institutions (Protection of Funds) Act.
According to a media release issued by the regulator, Jonker's debarment followed an inspection of the affairs of Interneuron during 2012, where the FSB found, among other things, that one client sustained substantial losses after the management of the client was entrusted to a representative of Interneuron. “The client experienced trading losses, and substantial amounts of the client’s investment were transferred to another client over the years. The representative falsified investment reports to the client regarding the performance of the investment,” the release says.
Interneuron also invested the client's funds in unsecured loans. These investments were outside the parameters of the client’s mandate to Interneuron.
The release says that the registrar debarred Jonker not because his representative's dishonesty was attributed to him, but because he had a legal duty in his capacity as key individual to manage and oversee the activities of both Interneuron and the representative. That legal duty required him to act with due care skill and diligence in terms of the Act. "It is the failure in that regard which contributed to the substantive losses sustained by the client."
In her judgment, the Appeal Board chairperson, Justice Yvonne Mokgoro, agreed with the registrar’s reasoning. Mokgoro pronounced extensively on the need for the gatekeepers (key individuals) to be positioned internally in a FSP to oversee the activities of the FSP in accordance with the FAIS Act.