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16 July 2018 — DFSA fines Al Ramz and former employee for failing to cooperate and provide information regarding an investigation

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Dubai, UAE, 16 July, 2018: The Dubai Financial Services Authority (DFSA) today announced that it has fined Al Ramz Capital LLC (Al Ramz) and its former Head of Information Technology, Mr Najim Al Attar, for serious failures to provide complete and accurate information relevant to a DFSA investigation which commenced in 2014.

The DFSA imposed a fine of USD 205,200 (AED 753,084) on Al Ramz, which is a Recognised Member of NASDAQ Dubai. Al Ramz is also required to pay USD 100,000 (AED 367,000) towards the DFSA's investigation costs. In addition, the DFSA imposed a fine of USD 32,640 (AED 119,789) against Mr Al Attar.

The DFSA's action follows an investigation that initially focused on trading on NASDAQ Dubai by Al Ramz and others, which the DFSA suspected may have breached Part 6 of the DIFC Markets Law 2012. The DFSA later expanded the scope of its investigation to include further suspected contraventions, including obstructing the DFSA's investigation and providing information which was false, misleading and deceptive.

While the trading in question was eventually found not to be in breach of Part 6 of the DIFC Markets Law 2012, the DFSA found that during the investigation Al Ramz had failed to comply fully with requirements to provide the DFSA with information relevant to the investigation and deal with the DFSA in an open and cooperative manner. Al Ramz's misconduct included:

•   misleading the DFSA about the users of computers used by two Al Ramz brokers at the time of the trading in question;
•   selectively withholding from the DFSA certain material communications (including emails and recordings of telephone calls) relevant to certain trading;
•   failing to disclose that a member of Al Ramz's senior management was centrally involved in such trading; and
•   failing to disclose close family relationships between the Al Ramz client connected to the trading and certain senior members of Al Ramz's staff, including its senior management.

In relation to Mr Al Attar, the DFSA found that he:

•   engaged in conduct intended to obstruct the DFSA in the exercise of its powers, without having a reasonable excuse for doing so; and
•   provided information that was false or misleading to the DFSA, and concealed information where the concealment of such information was likely to mislead the DFSA.

Mr Al Attar's misconduct included:

•   reconfiguring computers of two Al Ramz brokers and providing these to the DFSA while claiming falsely that they were the computers used by the brokers at the time of the trading in question. In so doing, Mr Al Attar attempted to mislead the DFSA into believing they were the computers used by the brokers when that was not the case;
•   altering the email account of one of the Al Ramz brokers in an attempt to remove all email messages sent or received by that broker for the relevant period and conceal them from the DFSA;
•   deleting relevant electronic data collected during a DFSA inspection visit;
•   refusing to provide the DFSA with certain relevant electronic data stored on Al Ramz's IT system, and instructing a junior member of Al Ramz's IT team not to provide the DFSA with such data; and
•   providing false and misleading information to the DFSA regarding Al Ramz's IT system.

Mr Ian Johnston, Chief Executive at the DFSA, said: "The DFSA takes the failure to provide complete and accurate information very seriously. It is imperative that regulated persons, including Recognised Members of an Exchange, deal with the DFSA in an open and cooperative manner. In this matter, Al Ramz's conduct prolonged the DFSA's investigation and prevented the DFSA from obtaining relevant information at the appropriate time.

"This conduct caused the DFSA to incur considerable and otherwise unnecessary investigative costs, which is why it is appropriate for Al Ramz to reimburse the DFSA. Further, the DFSA has very low tolerance for individuals who take steps to obstruct our investigations or provide us with false and misleading information."

Al Ramz and Mr Al Attar each agreed to settle the DFSA's action against them. In reaching settlement, the DFSA agreed to reduce the fine imposed on Al Ramz by 10%, and the fine imposed on Mr Al Attar by 20%, under the DFSA's policy for early settlement. Were it not for these discounts, the fines would have been USD 228,000 (AED 836,760) for Al Ramz, and USD 40,800 (AED 149,736) for Mr Al Attar.

The detailed reasons for the DFSA's action against Al Ramz are set out in the DFSA's Decision Notice dated 28 June 2018 which can be found in the Regulatory Actions section of the DFSA website: https://www.dfsa.ae/en/What-We-Do/Enforcement#Regulatory-Actions

The detailed reasons for the DFSA's action against Mr Al Attar are set out in the DFSA's Decision Notice dated 28 May 2018 which can be found in the Regulatory Actions section of the DFSA website: https://www.dfsa.ae/en/What-We-Do/Enforcement#Regulatory-Actions

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For further information please contact:

Corporate Communications
Dubai Financial Services Authority
Level 13, The Gate, West Wing
Dubai, UAE
Tel: +971 (0)4 362 1613
Email: DFSAcorpcomms@dfsa.ae
www.dfsa.ae

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 also exercises delegated enforcement powers under the DIFC Companies Law. These include powers to investigate the affairs of DIFC companies and partnerships where a material breach of DIFC Companies Law is suspected and to pursue enforcement remedies available to the Registrar of Companies (Roc).

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

Mr Johnston 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, Mr Johnston played a leading role in the Trustee industry and served on the National Council of the Trustee Corporations Association.

In 1999, Mr Johnston 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, Mr Johnston took up a position with the Hong Kong Securities and Futures Commission as a Special Advisor.

Mr Johnston is a past Chairman of the Joint Forum, which comprises 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).