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The Dubai Financial Services Authority (DFSA) has issued notices of decision to take action against three related companies of which Stuart Coles and Coles are the sole owners and directors. The three companies are Coworth Fintech Ltd, Coworth Investments Ltd and Novus Fintech Ltd.
DFSA fined Coles US$240,000 (AED881,400). The DFSA also restricts Coles from performing any function in or from the DIFC in relation to the provision of financial services and prohibits Coles from holding office or being an employee of any of the DIFC’s authorised persons, DNFBPs, reporting entities or domestic funds.
The DFSA decided to publicly condemn the three companies involved in the matter.
Controversial findings
Coles contested the DFSA’s findings and referred the decision to the Financial Markets Tribunal (FMT) for review, where both parties will present their cases. As such, the DFSA’s decision is provisional and reflects the DFSA’s view of what happened and how it believes Cole’s actions should be described.
The FMT will determine the appropriate action, if any, to be taken by the DFSA. The DFSA’s decision may be confirmed, changed or reversed as a result of FMT’s review.
In April 2021, the DFSA launched an investigation under the Regulation Act as it suspected that Coworth Fintech, Novus Fintech and others may be conducting financial services activities in or from the DIFC without authorisation.
Investigation expands
The DFSA later expanded its investigation to include Coworth Investments, which has a trading address and registered office in the UK.
In May 2021, DFSA went to DIFC’s Coworth Fintech and Novus Fintech offices to obtain certain information and documents that DFSA deems relevant to the investigation. As the sole owner and director of the three companies, Coles instructed those in the office not to allow DFSA to inspect and copy the requested information stored on computers and other equipment used in the DIFC office. Coles offered no reasonable excuse for his refusal, and his failure to comply with DFSA’s information gathering requirements hindered the DFSA’s investigation.
Patrick Meaney, Director of Enforcement at the DFSA, said: “The DFSA will not allow individuals or companies to obstruct a legitimate investigation. Such conduct undermines the core objectives of the DFSA and demonstrates that those engaged in such conduct are completely unfit to do business in the DIFC. The large fine imposed on Coles also demonstrates that the DFSA will take appropriate action against the individuals most responsible for misconduct.”- arab trade news agency
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