Dubai Regulator Fines Liquidated Service Provider EUR €220,000
Morgan Gatsby, formerly known as Sidra Capital, is an international service provider and business conglomerate. The firm was founded in Dubai, and operates across a range of sectors in entertainment, media, infrastructure, finance, and precious metals.
The company was previously suspended for, inter alia, unlawfully promoting an unregulated foreign fund and now faces a financial penalty, for multiple serious breaches, the Dubai Financial Services Authority has ruled after a month-long investigation.
After going into liquidation, the firm offered a range of high-risk services to HNWIs and SMEs such as: investment banking, wealth management and corporate and tax advisory. It has been ordered to pay EUR €220,744 in fines and penalties, of which a settlement discount of 30% is included in the final amount.
The chief executive of the DFSA in Dubai stated that the service provider has had a history of non-compliance with the legislation administered by the DFSA, even after repeated warnings on several occasions that its practices were unethical and failing to meet the national standards of Dubai law.
The firms repeated breaches and omissions to act
The wealth firm’s licence was suspended for 12 months back in November 2018, due to concerns regarding its non-compliance, namely for the following mis comings:
- Unlawful promotion of an unregulated foreign fund.
- Made unauthorised transactions on behalf of two customers and engaging in misleading and deceptive conduct relating to those transactions.
- Failure to comply with certain restrictions on business and dealing with property imposed by the DFSA in May 2018.
- Failure to correctly classify a customer and conduct the necessary KYC procedures into a client’s source of funds and rationale for entering into transactions.
- Failure to obey to DFSA regulations regarding the safe custody of client assets.
- Failure to ensure that its board of directors was provided with correct data.
Morgan Gatsby had the option to appeal the suspension by referring it to the Financial Markets Tribunal (FMT), however opted not to do so.
According to the DFSA notice, published earlier last month, the wealth management firm’s shareholders passed a number of resolutions at an ordinary general meeting back in 2018. These included making an application for the withdrawal of its licence accordingly and liquidating the company.
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