Court bars ex-Nedbank financial adviser from using client data

A former Nedbank financial adviser has been ordered to hand over and delete confidential client information after the court found he used the bank’s information to approach clients and solicit their business.

The order by the Western Cape High Court also bars Deon Smit from suggesting he still works for, represents or is affiliated with Nedbank. He has 10 days to return hard copy records and permanently delete protected information from his personal electronic devices, emails, messaging applications and cloud storage accounts.

Judge Mangcu-Lockwood handed down the judgment on October 27, ordering Smit to pay Nedbank’s legal costs, including the costs of counsel.

The court found Smit had misappropriated personal and confidential information and his conduct threatened clients’ privacy and the bank’s business interests. It said the public needed protection, including vulnerable and elderly people who could be targeted by his conduct.

The case followed complaints from Nedbank clients who alleged Smit contacted them by telephone, email, WhatsApp and in person and discussed their investments. He also encouraged them to move their money to another financial services provider he worked for.

According to the judgment, Smit worked as a financial planner and consultant at Nedbank from February 2009 until his dismissal for dishonest conduct on December 1 2022.

He later worked at Warwick Wealth before being debarred for similar conduct involving the alteration of a document after it had been signed by a client. The Financial Services Tribunal confirmed the debarment on appeal.

In July 2024, he returned to work as a representative of Equi Pro Wealth. Nedbank said it soon began receiving complaints from clients who had been approached by Smit.

The complaints included allegations that he told clients their investments needed to be reviewed or were performing poorly and encouraged them to withdraw their money from Nedbank and reinvest through Equi Pro Wealth.

Some clients were allegedly presented with forms containing their personal and investment details.

In one instance, the court heard Smit sent a client a Nedbank statement dated April 2023 through WhatsApp. The judgment said he did not have consent from the bank or the client to possess the statement.

Smit admitted to contacting Nedbank clients, discussing their investments, sending them emails and seeking mandates.

The court found his admissions confirmed breaches of the confidentiality and non-solicitation clauses in his employment contract.

“The respondent [Smit] was not entitled to use information he gained from his employment at the applicant [Nedbank] to gain entry into the lives of clients, for any purpose, including his new employment,” the judge said.

The judgment found the information included clients’ names, identification numbers, physical and email addresses, telephone numbers, financial histories and investment preferences.

The court said the information was protected by the Protection of Personal Information Act, which seeks to safeguard personal information held by public and private bodies.

It found Smit had disregarded clients’ constitutional right to privacy and that Nedbank had a duty to protect the information entrusted to it.

The judge also rejected Smit’s challenge to the complaints against him, finding no basis to conclude they had been manufactured or prompted by bias against him.

The court noted Nedbank had sent him a cease-and-desist letter on September 6 2024, warned clients he no longer worked for or represented the bank, and reported his conduct to the Financial Sector Conduct Authority on November 14 2024. It said he continued despite these steps.

Under the order, Smit must also submit an affidavit within 15 days confirming he has returned or deleted the protected information. He must identify any information retained, explain who it is being held for, provide the legal basis for keeping it and state how long it will be retained.

The order does not prevent him from doing business with former Nedbank clients who contact him independently or whose contact details he obtained lawfully and independently. However, he may not use protected information or mislead clients about his association with Nedbank.

The court said the restrictions did not prevent Smit from earning a living, but required him to act lawfully and comply with his contractual obligations.