Invalid Password Error with Special Characters

We are having an issue with the Kanaka client ver. 2.7 running on OSX 10.7 and 10.8. Most users can authenticate without any issue, however, if their password contains a "&" or "%" they receive a password is invalid error message. The server log just shows the same invalid authentication code (197). We are using universal password and if the user changes their password to remove those characters, they can authenticate without a problem.

Is anyone else experiencing this issue? We are on OES2SP3.