The Dubai Financial Services Authority (DFSA) has imposed restrictions on David Barnett and Christopher Steer after investigating their conduct during their work at the brokerage office of a licensed company at the Dubai International Financial Center (DIFC).
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 the Murabaha transactions and through the basic commodities purchased and procured by the Office, Shari'a compliant deposits and derivatives for their clients. Barnett held the office until February 2016, while Steer was a senior broker in the office and chief executive officer of the firm.
The investigations revealed that during the period from January 1, 2014 to December 31, 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, Of Murabaha transactions, through the re-use of title deeds of mineral goods previously purchased by the Office, although they are no longer usable.
In addition, Barnett misled dealers by 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 titles as part of Murabaha transactions and that the office had no title deeds. However, no steps were taken to stop the facilitation of murabaha transactions, The Authority has reached a decision that Barnett has not acted with the integrity required by his position and is not qualified and competent to perform any financial service assignment 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 that Barnett and Stier have. The company reported the misconduct to the Dubai Financial Services Authority (DFSA) following the suspension of its activities in February 2016. It also cooperated with the Authority's investigations.
"We expect all employees of licensed companies operating in the DIFC to adhere to the highest standards of professionalism and integrity in the performance of their duties," said Brian Stairault, Chief Executive Officer, DFSA. This measure also confirms that the DFSA is very important to ensure the integrity of Islamic finance transactions. "
The decision to impose restrictions on both Barnett and Steyr is immediately effective, both of which have agreed to their content, while the proceedings against them are final.