For his involvement in violations of anti-money laundering regulations and obstruction of investigations

Dubai Financial Services fines a former bank manager 605,000 dirhams

The manager used to work in a private bank in the DIFC.

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Yesterday, the Dubai Financial Services Authority published a notice of its decision against the former Relationship Manager of one of its licensed firms, Ashish Bandari.

In a statement, the authority stated that on September 17, 2020, measures were taken against Bandari, for his involvement in perceiving violations of anti-money laundering regulations during the years from 2011 to 2013 and obstructing the conduct of the Authority's investigations during 2017 and 2018, when it imposed a fine of $ 165,000. (About 605.5 thousand dirhams) and restricting him from exercising any tasks related to providing financial services in or from the Dubai International Financial Center.

According to the statement, Bandari referred the decision issued against him to the Financial Markets Legal Authority on October 18, 2020, but that referral was withdrawn after reaching a settlement agreement with the Dubai Financial Services Authority.

This action comes after the authority discovered that Bandari, who held the position of a relationship manager at a private bank in the Dubai International Financial Center, was the director and real beneficiary of an entity registered in the British Virgin Islands that was established with a third party providing potential clients to the business owner.

Bandari arranged for the Virgin Islands entity to receive referral fees paid from his employer to the third party provided to clients without disclosing his role in that entity.

The company that Bandari works for believed that the entity in the Virgin Islands was owned and under the control of the third party provided to potential clients, and Bandari also received instructions from some clients to transfer funds to the entity in the British Virgin Islands, and from those funds received large sums were transferred to his own bank accounts outside UAE.

The authority discovered that Bandari was able to follow up on the transfer of funds and thereby retain clients by not disclosing his foreign activities and his role in the entity in the British Virgin Islands.

For its part, Bandari's licensed company failed to take the necessary steps to verify the identity and ownership of the entity in the British Virgin Islands in accordance with its commitment under anti-money laundering regulations, and instead accepted Bandari's assertions, which he was fully aware of that they were not correct.

The DFSA found that Bandari was aware of his company's breach of anti-money laundering legislation by concealing relevant information from the licensed company and its compliance team.

Moreover, Bandari failed, without any acceptable excuse, to comply with the DFSA's requests to provide more information, but rather provided the authority with false, misleading or deceptive information with the intent to obstruct the progress of the investigations.

“The employees of the licensed companies have a duty to act with absolute integrity and professionalism, especially the employees responsible for dealing directly with clients and investors,” said Chief Executive Officer of the Dubai Financial Services Authority, Brian Stearwalt.

He added: "The Dubai Financial Services Authority expects complete honesty and transparency upon requesting them to provide information, and will not hesitate to impose restrictions and penalties on violators."

"The fine imposed in this case was higher than usual, because the authority had previously imposed penalties in connection with a very similar incident of misconduct," Stairwalt said.

Restricting the manager from exercising any tasks related to providing financial services.

The principal was the true benefactor of an entity registered in the British Virgin Islands.

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