Dubai: The Dubai Financial Services Authority (DFSA) on Sunday slapped hefty fines and sanctions on GFS Investments (Middle East) Limited, a company that offered online trading facilities in foreign exchange and commodities.
The DFSA's action follows a detailed investigation into the business operations of GFS Investments.
GFS Investments is licensed to provide an online foreign exchange and commodities trading facility to clients who meet DFSA's required eligibility standards. Eligible investors gain direct access to that platform via unique login and password.
Under its licence, GFS Investments was not permitted to conduct the trades, but received commissions for each trade carried out by its customers. The business is therefore suitable for professional investors who have relevant market experience, but unsuitable for retail investors.
An affected customer told Gulf News yesterday that the company used different customer accounts to carry out trades for customers who were not eligible under DFSA regulations.
"The investigations determined that GFS Investments had operated outside its authorisation by conducting business with non-eligible retail clients and by itself carrying out trading in the names of clients. The DFSA took immediate steps to ensure that no further unlawful trading took place," DFSA said in a statement.
Investigation revealed that some employees of GFS Investments engaged in conduct designed to misrepresent the eligibility of clients, including the falsification of client particulars.
Following investigations, the DFSA has imposed a range of sanctions including the banning of relevant individuals for five years from the Dubai International Financial Centre (DIFC); the imposition of fines; and the compensation of relevant clients for financial losses suffered as a result of the misconduct.
"The DFSA has an important role to maintain business standards within the DIFC. The vast majority of our licensed firms take their governance and compliance responsibilities very seriously and this has helped the DIFC to quickly establish a reputation for excellence.
"We are, therefore, disappointed by the unacceptable conduct of GFS Investments," said the DFSA's Chief Executive, David Knott.
"The DFSA's intervention will also ensure that all investors who suffered financial loss as a result of the misconduct will be fully compensated," he said.
The bans imposed by DFSA prevent the individuals from performing any function in or in connection with the provision of financial services or ancillary services in or from the Dubai International Financial Centre during the designated period.
All sanctions have been recorded in enforceable undertakings made with the DFSA by GFS Investments and its relevant officers and employees.
