The regulator of Dubai International Financial Centre (DIFC) has foiled a fraudulent online investment scheme, just months after it obtained an injunction against the operators of a similar scam.
The Dubai Financial Services Authority (DFSA) was alerted to the operations of Euro-America Index, which offered returns of between 100% and 230% on 100-day investment products, and claimed to have a trading centre in the DIFC, as well as in Chicago and Zurich. A DFSA investigation determined that Euro-America Index was never authorised to trade in any of these financial centres, including the DIFC.
The DFSA was assisted in its investigation by the US Securities and Exchange Commission (SEC) and the Swiss Federal Banking Commission (SFBC).
The Honourable Michael Hwang, deputy chief justice of the DIFC Court, passed orders halting Euro-America Index's activities and prohibiting the operation of its website.
David Knott, chief executive of the DFSA, said: "Once again, the DFSA acted swiftly to protect the reputation of the DIFC and prevent potential loss to investors.
"We are starting to see an increased trend in these types of e-frauds in the Middle East. Where they occur in our jurisdiction, the DFSA will take appropriate action."
In February, the DFSA halted a fraudulent internet investment scheme that tricked investors out of almost US$1 million.
A company calling itself Cambridge Capital Trading, which claimed to operate out of DIFC, made unsolicited telephone calls to investors in Australia and Singapore, offering them the opportunity to deal in currency options through the non-existent Dubai Options Exchange.
The fraudsters established a website for the fictitious exchange, as well as one for the exchange's regulator. Calls to a telephone number listed on the website were directed to an automated answering service in Dubai.
Funds were transferred to a bank account in Malaysia, which contained $600,000 at the time it was frozen by the authorities. A second account was later discovered containing $350,000.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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