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The latest sanction announced by DFSA relates to activities engaged in by the related firms even though they had no authorisation. Image Credit: Ahmed Ramzan/Gulf News

Dubai: In another crackdown, the Dubai Financial Services Authority has taken action against Stuart Coles and three companies in which he was the sole owner and director. These firms are Coworth Fintech Ltd., Coworth Investments Ltd., and Novus Fintech Ltd.. A fine of Dh881,400 has been imposed on Coles.

Coles has also been barred from any activity related to the provision of financial services ‘in or from the DIFC’. He also cannot hold office in or be an employee of any authorised person, reporting entity or domestic fund in the DIFC.

The three firms named by DFSA get public censures.

Coles has disputed the DFSA findings and referred the decisions to the Financial Markets Tribunal (FMT) for review. “The DFSA’s decision is therefore provisional and reflects the DFSA’s belief as to what occurred and how it considers Mr Cole’s conduct should be characterised,” a statement said. “The FMT will determine what, if any, is the appropriate action for the DFSA to take.”

Lead up to sanction

The DFSA decided to impose public censures on the three firms involved in this matter.

• In April 2021, DFSA commenced an investigation under the Regulatory Law because it ‘suspected that Coworth Fintech, Novus Fintech and others may have engaged in financial service activities in or from the DIFC without being authorised to do so’. The DFSA later expanded the investigation to include Coworth Investments, which had a trading address and registered office in the UK.

• In May 2021, the DFSA attended the offices of Coworth Fintech and Novus Fintech in DIFC to obtain specified information and documents the DFSA considered relevant to the investigation. As the sole owner and director of the three firms, ‘Mr Coles instructed people present in the offices not to allow the DFSA to inspect and copy the requested information stored on computers and other devices that were being used at the offices in the DIFC. Mr Coles did not have a reasonable excuse for his refusal and his failure to comply with the DFSA’s information-gathering requests obstructed the DFSA investigation’.

Such behaviour undermines the core objectives of the DFSA and demonstrates that those engaging in this conduct are entirely unsuitable to carry out business in the DIFC. The significant fine imposed on Mr Coles also demonstrates the DFSA will take appropriate action against individuals that are most culpable for misconduct

- Patrick Meaney, Head of Enforcement at DFSA