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Mon 23 Mar 2020 10:52 AM

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Morgan Gatsby exec fined by DFSA after 'multiple serious breaches'

Ajay Arora also banned from holding office or being an employee of a regulated DIFC firm

Morgan Gatsby exec fined by DFSA after 'multiple serious breaches'

The executive was banned from holding office or being an employee of a regulated DIFC firm and is forbidden from carrying out any financial services work from the DIFC.

A leading official at Morgan Gatsby Limited (MGL) has been fined $87,500 by the Dubai Financial Services Authority (DFSA) for “multiple serious breaches” of its legislation.

Senior executive officer (SEO) Ajay Arora has also been banned from holding office or being an employee of a regulated DIFC firm and is forbidden from carrying out any financial services work from the Dubai International Financial Centre (DIFC).

The DFSA found that Arora, who had been with the company since 2013 overseeing the day-to-day management, supervision and control of MGL’s financial services business, had continued to engage in misconduct, despite concerns over rule breaches being brought to his attention “on numerous occasions” from 2016.

Arora was found to be guilty of carrying out transactions on behalf of clients without their knowledge and providing “false or misleading information” or concealing transactions from clients.

He also failed to comply with a DFSA direction to keep its investigation confidential, and provided misleading and deceptive information to the DFSA regarding this failure.

Further breaches included, the illegal promotion of an unregulated foreign fund; failure to comply with certain restrictions on business and dealing with property imposed by the DFSA in May 2018; failure to properly classify a client and to conduct the necessary enquiries into the client’s source of funds and rationale for entering into transactions; and failure to ensure that MGL’s board of directors was provided with accurate information.

Bryan Stirewalt, chief executive of the DFSA, said: "We hold authorised individuals, particularly SEOs, to the highest standards of integrity in discharging their responsibilities for the management, supervision and control of an authorised firm.

“Mr Arora did not meet these standards, even after he was repeatedly notified of compliance concerns regarding MGL’s activities.

“The DFSA will take strong action against individuals who breach the DFSA’s legislation, and will pursue stronger action yet where misconduct continues despite warnings.”

Following a request by Arora to reduce the fine on the grounds of financial hardship, and with an agreement to settle early, the amount was dropped down from $187,500.

DFSA fined MGL $246,000 in January for multiple serious breaches of the authority’s legislation. It had previously suspended MGL’s licence in November 2018 due to concerns regarding non-compliance with legislation.

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