DFSA Cracks Down on Financial Misconduct with Heavy Fines and Bans

This year, the Dubai Financial Services Authority (DFSA) has taken decisive action against financial misconduct, penalizing both individuals and firms involved in money laundering and fund mismanagement.

A former relationship manager was fined nearly $1 million (around Dh3.6 million) for facilitating a money laundering process known as layering. This deceptive practice involves conducting multiple transactions to disguise the origin of funds while maintaining control over the money. The banker also provided false information to his compliance team to perpetuate the activity, earning significant bonuses from client commissions. In addition to the hefty fine, he has been banned from working in the industry, effectively ending his career.

In another case, OCS International Finance was fined for misusing client funds. The company misled a bank about the nature of deposited money and diverted client funds to a related party without informing the clients. These funds were not repaid, violating the regulatory mandate to safeguard client money in separate accounts.

DFSA Chief Executive Ian Johnston emphasized the importance of thorough investigations, which involve data collection, communication reviews, and interviews, often taking several months to a year to complete. While the scale of breaches this year is less severe compared to previous years, officials believe this reflects improved compliance following past sanctions.

The DFSA’s enforcement measures highlight its commitment to maintaining financial integrity and deterring misconduct in the financial sector.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels