11 May 2016 — DFSA Restricts Former Trader Noyan Ayhan

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Dubai, UAE, 11 May 2016: The Dubai Financial Services Authority (DFSA) announced today that it has imposed a restriction on Mr Noyan Ayhan, a former trader at a DFSA Authorised Firm, after he inflated the value of his trading book by around USD 11,000,000 (AED 40,425,000) to cover up losses.

The DFSA imposed the restriction because it found that Mr Ayhan's misconduct demonstrated that he lacked integrity. As a result, the DFSA concluded that he is not fit and proper to perform any functions in connection with the provision of Financial Services in or from the Dubai International Financial Centre (DIFC).

The DFSA's action follows an investigation which found that, while a trader at a DFSA Authorised Firm (the Firm), Mr Ayhan:

•   falsified internal Firm records on at least 163 occasions from May to July 2014, by entering false prices in the records. The effect of this was to overstate his trading profits or conceal his trading losses by approximately USD 11,000,000 (AED 40,425,000) — a practice known as "mismarking";
•   colluded with traders on a Turkish market to "mark the close" on the last trading day of the month in April, May and June 2014, by creating closing prices that would match his mismarks. He did so to avoid the Firm's internal controls and conceal his mismarking;
•   instructed a subordinate employee to enter false daily marks on one occasion while Mr Ayhan was out of the office; and
•   denied any wrongdoing when the Firm questioned him, despite the Firm having presented him with evidence showing that he had mismarked the Firm's records.

The Firm carried out an internal investigation and found that Mr Ayhan acted dishonestly and committed gross misconduct under the Firm's codes of conduct. The Firm notified the DFSA of the misconduct, and co-operated fully with the DFSA's investigation. The DFSA has not taken any enforcement action against the Firm.

Mr Ian Johnston, Chief Executive of the DFSA said: "The DFSA expects employees of Authorised Firms in the DIFC to act with integrity when performing their duties. Mr Ayhan was a senior and experienced trader who held a position of trust at the Firm. Mr Ayhan's actions in deliberately mismarking his positions and engaging others in his misconduct fell far short of the DFSA's expectations."

After a period of six years, the DFSA may consider varying or revoking the restriction on application by Mr Ayhan.

A copy of the DFSA's Decision Notice can be found in the Regulatory Actions section of the DFSA website:

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For further information please contact:
Kaja Mohaisen
Corporate Communications
Dubai Financial Services Authority
Level 13, The Gate, West Wing
Dubai, UAE
Tel: +971 (0)4 362 1662

Editor's notes:

The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in or from the Dubai International Financial Centre (DIFC), a purpose-built financial free-zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for supervising and enforcing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) requirements applicable in the DIFC. The DFSA has also accepted a delegation of powers from the DIFC Registrar of Companies (RoC) to investigate the affairs of DIFC companies and partnerships.

Ian Johnston was appointed as Chief Executive of the DFSA in June 2012. Ian joined the DFSA in November 2006, as a Managing Director, to head the Policy and Legal Services Division.

Ian was admitted to practice Law in Australia in the early 1980s and has spent most of his career in the private sector. He held a number of senior positions within the financial sector and was CEO of one of Australia's major Trustee Companies. During that time, Ian played a leading role in the Trustee industry and served on the National Council of the Trustee Corporations Association.

In 1999, Ian joined the Australian Securities and Investments Commission where he held the position of Executive Director, Financial Services regulation, and spent several terms as an acting Commissioner. In 2005, Ian took up a position with the Hong Kong Securities and Futures Commission as a Special Advisor.

Ian is a past Chairman of the Joint Forum, which comprise representatives of the major international regulatory standard-setters (IOSCO, IAIS and the Basel Committee). In November 2013, he was elected to the Steering Group of IOSCO's Growth and Emerging Markets Committee. He is also a member of the Financial Stability and Technical Committee (FSTC) of the IAIS, the global standard-setting body for insurance regulation, and was a member of the Board of Directors of the Financial Planning Standards Board (from Jan 2011 – Mar 2016).