The Dubai Financial Services Authority (DFSA) has imposed restrictions on David Barnett and Christopher Steer after investigating their behavior while working for a brokerage office in a Dubai International Financial Center (DIFC) brokerage firm.
The Authority confirmed in a statement yesterday that the Office facilitated the purchase and supply of title deeds for the commodities by a number of suppliers to be used by its clients in Murabaha transactions and through the basic commodities purchased and procured by the Office, Financing, deposits and derivative financial products in accordance with Islamic Sharia'a law for their customers. Barnett assumed office until February 2016, while Steer was a senior broker in the office and CEO.
The Authority's investigations revealed that during the period from 1 January 2014 to 31 December 2015, the Office ceased to purchase the title of the required metal goods from its customers, because Barnett and Stier did not obtain it from the suppliers. Instead of stopping the activities of the Office, Facilitating a large number of Murabaha transactions through re-use of metal commodity titles previously purchased by the Office, although they are no longer usable.
In addition, Barnett misled dealers, claiming that the office was providing legal title to commodities, used to facilitate Murabaha transactions, although they were not.
In the course of his duties as Chief Executive Officer, Steer was aware that the clients of the office needed commodity title as part of Murabaha transactions and that the office had no title deeds. However, he did not take steps to stop facilitating Murabaha transactions. The Authority "to a decision that Barnett did not act with the integrity required by his position, and has no merit and eligibility to perform any functions related to the provision of financial services in or from the DIFC. "The Authority also believes that Mr. Steer has shown incompetent conduct of licensed tasks, which means he lacks the merit and competence to perform licensed functions related to the provision of financial services in or from the DIFC."
The Authority has also decided not to take any action against the company Barnet and Stear has. The company informed the Dubai Financial Services Authority (DFSA) of misconduct following the suspension of its activities in February 2016. It also cooperated with the Authority's investigations.
The decision to impose restrictions on Barnett and Steyr is immediately effective, both of which have agreed to their content, while the proceedings against them are final.