Dubai: Dubai Financial Services Authority (DFSA), the regulator of the Dubai International Financial Centre (DIFC) fined La Tresorerie Ltd $612,790 (approximately Dh2.25 million) for serious regulatory failings.
The total fine includes $261,154 (approximately Dh960,000) disgorgement of the financial benefit La Tresorerie received, plus interest. The penalty follows an investigation process that commenced in 2017.
“The DFSA has taken this action against La Tresorerie, a DFSA authorised firm, due to multiple, serious breaches of DFSA legislation, mainly arising from conducting an illegal service that provided physical cash to its clients (Illegal Cash Service). The DFSA has taken this action to penalise La Tresorerie, deter others and protect clients,” the regulator said in a statement.
Illegal cash service
The illegal cash service involved the use of false invoices and transferring client money to unregulated companies outside of DIFC; the transportation of large amounts of physical cash from the UAE to a foreign country (which is associated with a high risk of money laundering); misleading its custodian and a bank about the nature and purpose of certain transactions when AML (anti-money laundering) due diligence enquiries were made; and demonstrated a fundamental failure of La Tresorerie to conduct its business with integrity, according to the DFSA.
“The illegal cash service provided by La Tresorerie was a serious breach of DFSA rules, further compounded by the senior management’s attempts to disguise this business activity,” said Bryan Stirewalt, Chief Executive of DFSA.
“This activity demonstrated a clear lack of integrity, and opened the firm up to a high risk of money laundering, as well as placing client money at undue risk. We will take strong action against any firm or individual who demonstrates such a risk to the DIFC.”
The illegal cash service, according to the DFSA statement was in systematic operation between February 2015 and January 2017, and was carried on with the knowledge and involvement of La Tresorerie’s senior management at the time.
However, the DFSA said the current senior management of La Tresorerie were not involved in the illegal cash service and reported it to the DFSA upon discovering it.
The DFSA’s investigation found more than 100 transactions carried out, ranging in value from €2,560 (approximately Dh10,000) to €500,000 (Dh2 million). The total amount of physical cash provided by La Tresorerie was calculated to be the equivalent of over $7.3 million (Dh27 million) and the fees the firm received were the equivalent of almost $220,000 (Dh800,000).
The DFSA reached a settlement with La Tresorerie in respect of the findings of its investigation and the amount of penalty. This settlement was, however, reached after the period that the DFSA had set for a settlement discount to be available.
“If settlement had been achieved during that period, La Tresorerie would have been able to obtain a 30 per cent discount to the fine imposed,” the regulator said in a statement.