This year, the Dubai Financial Services Authority (DFSA) took firm action against financial misconduct, targeting a company that mishandled client investment funds and an individual involved in money laundering.
In one case, a former relationship manager was fined nearly $1 million (around Dh3.6 million) for deceptive practices and for facilitating a money laundering method known as layering.
Patrick Meaney, head of enforcements at DFSA, explained layering as a technique involving a series of transactions to make it appear that money is transferred between different people. “In reality, it’s the same individuals controlling the funds,” he said.
The individual in question, identified as private banker Peter Georgiou, provided false information to his compliance team, allowing the misconduct to continue. “He earned significant bonuses through commissions from these clients,” Meaney said. This led to a career-ending penalty for Georgiou, who was not only fined but also banned from working in the industry.
“Such actions are crucial as a deterrent,” Meaney emphasized. “While companies may treat fines as a cost of doing business, for individuals, it’s a serious consequence losing a career and paying a large sum.”
The DFSA shared these details during a media roundtable, shedding light on their enforcement measures and recent cases.
Misusing Client Funds
Another case involved OCS International Finance, which faced penalties for mishandling client funds. “They misled a bank about the nature of deposited money and later misused it,” Meaney explained. Instead of keeping client funds in a separate account as required, the company lent the money to a related party without informing the client. “That party failed to repay, creating a significant issue,” he said.
Ian Johnston, DFSA’s chief executive, highlighted the authority’s thorough approach to investigations. “We follow proper processes—gathering data, reviewing communications, and interviewing individuals to uncover the truth,” he said. These investigations often take close to a year to complete.
Meaney noted that while this year’s breaches were smaller in scale compared to previous years, it might indicate that firms are becoming more compliant. “We hope lessons from past sanctions have been taken seriously,” he added.
