A senior executive who was working at the Dubai International Financial Centre (DIFC) has been fined $87,500 (approximately Dhs321,000) and prohibited from holding office or being an employee of a regulated DIFC firm.
He was penalised for “multiple, serious and continuous breaches” of legislation, said the Dubai Financial Services Authority (DFSA) which regulates the DIFC .
Ajay Arora, who has been the senior executive officer (SEO) of Morgan Gatsby Limited (MGL) since March 2013, has also been restricted from performing any functions related to financial services in or from the DIFC, a statement said.
As SEO, he had ultimate responsibility for the day-to-day management, supervision and control of MGL’s financial services business.
However, Arora “executed client transactions without authorisation and engaged in misleading and deceptive conduct towards those clients and the DFSA”, the statement added.
He allegedly provided false or misleading information about effected transactions to two clients. One of the transactions was carried out despite the client having given explicit instructions to the contrary, the DFSA said.
He “contravened the DFSA’s principles for authorised individuals by failing to observe high standards of integrity and fair dealing”, it added.
The authority also alleged that Arora and MGL “continued to engage in misconduct, despite concerns about rule breaches being brought to his attention on numerous occasions from 2016 onward by both the DFSA and MGL’s compliance function”.
He did not take sufficient action to stop the misconduct or to improve the firm’s systems and controls.
The executive was also found to breach DFSA legislation through his involvement in MGL’s operations including:
· Illegal promotion of an unregulated foreign fund
· Failure to comply with certain restrictions on business and dealing with property imposed by the DFSA in May 2018
· Failure to properly classify a client and to conduct the necessary enquiries into the client’s source of funds and rationale for entering into transactions
· Failure to ensure that MGL’s board of directors was provided with accurate information
Arora also failed to keep the investigation confidential and provided misleading and deceptive information to DFSA, it added.
The DFSA said it considered Arora’s request for a reduction in the amount of the fine on the grounds of financial hardship and agreed to reduce the amount. Arora also agreed to settle the DFSA’s action at an early stage of the DFSA investigation and, therefore, qualified for a reduction of the fine under the DFSA’s policy for early settlement.
Were it not for the reductions for financial hardship and for early settlement, the DFSA would have imposed a fine of $187,500 (approximately Dhs689,000), the regulator added.
Bryan Stirewalt, CEO of the DFSA, said: “We hold authorised individuals, particularly SEOs, to the highest standards of integrity in discharging their responsibilities for the management, supervision and control of an authorised firm. The DFSA will take strong action against individuals who breach the DFSA’s legislation and will pursue stronger action yet where misconduct continues despite warnings”.