Dubai: The DIFC-licensed OCS International Finance Ltd. has been hit with a Dh2.64 million fine, while its CEO, Christian Thurner has to shell out a further Dh682,631. This is after a 30% settlement discount.
This comes after an investigation by the DIFC regulator Dubai Financial Services Authority found OCS 'breached multiple DFSA rules', including the mismanagement of Dh168.82 million ($46 million) of client funds. The charges against the company also extends to misleading a bank and the DFSA.
Thurner has also been prohibited from holding any executive or employee position in an authorised person, designated non-financial business or profession, reporting entity, or domestic fund.
As has been the case with earlier such violations where DFSA has oversight, he is also 'restricted from performing any financial service-related functions in or from the Dubai International Financial Centre'.
“The integrity of the DIFC is essential in maintaining investor confidence. Firms and individuals in the DIFC must adhere to the highest standards of conduct and integrity - especially when dealing with client funds," said Ian Johnston, Chief Executive of the DFSA. "Our enforcement actions send a strong message that we will not tolerate misleading or obstructive behaviour, and we will take necessary steps to protect investors.”
What DFSA uncovered
- Mishandled around $46 million in client funds before being authorised by the DFSA to carry on financial services within the DIFC.
- Misleading its bank through false documents related to the client funds.
- Failed to maintain the said funds in a separate client account and misusing them for purposes not authorised by the client.
- Providing its bank with misleading documents that disguised the true nature of its financial arrangement with the client. Despite agreeing with the client to void the agreement, OCS presented a falsified version of the agreement to the bank.
- Submitting false or misleading information to the DFSA, including concealing Thurner’s prior convictions during his application for DFSA authorisation. And for sharing incorrect information on the client’s bank account opening dates.
According to DFSA, OCS and Thurner 'repeatedly failed' to provide the regulator with bank statements, including one that documented the receipt of the $46 million in client funds. There were also attempts at obstructing the DFSA investigation by withholding required documents. And, OCS consistently failed to meet DFSA’s regulatory reporting requirements.
