Dubai: A former relationship manager at a DIFC-licensed firm has been fined $165,000 overr anti-money laundering rules and for obstructing the regulator in its efforts.
Ashish Bhandari will also be barred from performing any activity within or from the DIFC free zone from now on. He "failed without reasonable excuse to comply with the DFSA’s requests to provide information and provided false, misleading or deceptive information to the DFSA, or concealed information from the DFSA, with the intention of obstructing the DFSA’s investigation," the regulator added in a statement.
In an update issued on Tuesday, the DFSA said it did not make a finding that Bhandari had engaged in money laundering.
The breaches on the anti-money laundering happened during 2011-2013, while the obstruction of the regulator – Dubai Financial Services Authority – relates to 2017-18.
The fine is higher than it would have been as the DFSA has previously imposed sanctions for highly similar misconduct. We expect standards to improve and we will hold to account those who fail to learn.
What actually happened
Bhandari was a relationship manager with a private bank in the DIFC. The DFSA found that he was also director and registered beneficial owner of an offshore entity registered in the British Virgin Islands (BVI), which had been set up with an introducer of his employer.
Bhandari arranged for the introducer's referral fees to be paid by his employer to the BVI entity without disclosing his involvement in the entity. He was also instructed by certain of his clients to transfer money to the BVI entity.
The employer, meanwhile, thought the BVI entity was owned and controlled by the introducer.
From the money transferred to the BVI entity, sums were then transferred to Bhandari’s personal bank accounts outside the UAE.
“The DFSA found that, by not disclosing his outside activities and involvement in the BVI entity, he was able to maintain the fund routing arrangements and thereby retain clients,” DFSA said in a statement.
The DFSA found that Bhandari was knowingly concerned in breaches of AML legislation by concealing relevant information within his knowledge from the authorised firm and its compliance function.
Obligation to clients
"Employees at authorised firms have a duty to act with integrity and professionalism, even more important for those employees who are responsible for dealing directly with clients and investors," said Bryan Stirewalt, Chief Executive of DFSA. "When called to give an account of their knowledge and actions, the DFSA expects complete honesty and transparency. Anything short of that will result in significant penalties and restrictions."