DFSA cracks down on fraudulent fund

Dubai: The Dubai Financial Services Authority (DFSA) said yesterday that it has obtained injunctions from the Dubai International Financial Centre (DIFC) Court against the operators of the Euro-America Index, which it claims is a fraudulent investment scheme.

Euro-America Index is an internet-based bogus investment scheme originating in Southeast Asia last year and its website (www.eaindex.com) claimed that it has three global trading centres including Chicago, Zurich and Dubai.

"The DFSA was alerted about the operations of Euro-America Index two weeks ago and we immediately began an investigation into the case in association with the US Securities and Exchange Commission (SEC) and the Swiss Federal Banking Commission (SFBC).

"Subsequently a case was filed against the operators of the website at the DIFC court," said Niall Coburn, DFSA Director of Enforcement.

High returns

The website purported to offer returns of 100 per cent to 230 per cent on 100-day index investment products.

The minimum investment is $20 and offers 1.8 per cent daily for 100 days, 2.3 per cent daily for 100 days for deposits above $5,000.

Euro-America Index has been using the system of epoint transactions where members could buy/sell or trade among themselves. The pyramid like scheme promoted cash deposits via wire transfer, while trades were enabled through epoints.

The DFSA investigation has revealed that Euro-America Index was never authorised to trade in any of the financial centres listed on their website, including the DIFC.

Deputy Chief Justice of the DIFC Court Michael Hwang yesterday prohibited the operation of the website and stopped the conduct of Euro-America Index.

DFSA officials said the owner of the website, Domains by Proxy Inc. and GoDaddy.com based in Arizona, USA cooperated with the investigations and have stopped using the names of DIFC and other financial jurisdiction.

Commenting on the case, DFSA Chief Executive David Knott said: "The DFSA acted swiftly to protect the reputation of the DIFC and prevent potential loss to investors.

"Investors must exercise extreme caution when they view sites on the internet, be sure to obtain confirmation that the organisation is licensed and obtain independent financial advice before parting with their money.

"We are starting to see an increased trend in these types of e-frauds in the Middle East. Where they occur in our jurisdiction, the DFSA will take appropriate action".