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Thu 19 Apr 2007 10:57 AM

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DFSA thwarts internet scam

The Dubai Financial Services Authority has closed down a Dubai-hosted website used to front an unlicenced investment company.

The Dubai Financial Services Authority (DFSA) has successfully closed down a Dubai-hosted website used to front an unlicenced investment company.

The fake site, SMI Equity, was using the UAE as a base address. The DFSA was alerted to the unlicenced operation of SMI Equity by an investor in the Czech Republic who had already deposited US$45,000 into the bank account of SMI Equity and became suspicious when he received no response after the investment was made.

"All investors are advised not to respond to unsolicited telephone calls or emails that ask for money or recommend investments without first checking with a trusted and experienced advisor," commented David Knott, CEO of the DFSA.

The investor contacted the DFSA after reading warnings on their website, which provides information and past media releases on internet scams and frauds. The DFSA immediately contacted the website host provider in Dubai and arranged to close the website down with immediate effect.

While unlicenced, SMI Equity claimed to offer investment opportunities and provide investment advice to prospective customers in Eastern Europe, using a UAE address and PO Box. The website was used to encourage investors to invest mainly in pre-IPO securities in the United States.

"The internet has added a fantastic new dimension to our daily lives but has also opened up prospects for criminals to prey on the public," observed Knott.

The attack echoes an earlier one last month when the UAE's Telecom Regulatory Authority dismantled a large internet crime ring offering bogus investment services from the DIFC. Indeed, lately the UAE has been the focus of attention regarding cybercrime in the Gulf as the number of attacks become more prolific. The DFSA has also warned that cold-calling schemes will increasingly occur in the Middle East, as Dubai and other regional centres expand their capital markets.

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