21 November 2007 — DFSA bans private bankers for mis-selling investments
The Dubai Financial Services Authority (DFSA) has banned two private bankers from carrying out financial services in or from the Dubai International Financial Centre (DIFC).
The DFSA accepted Enforceable Undertakings from Ms. Vanita ChatterbhojMs. Vanita Chatterbhoj and Ms. Sweta NayarMs. Sweta Nayar, former Barclays Bank PLC (Barclays) private bankers, for knowingly misrepresenting the terms of financial products sold to their clients.
Under the terms of the Enforceable Undertakings, Ms. Chatterbhoj is banned from carrying out any financial services in or from the DIFC for a period of three years. Ms. Nayar is banned from carrying out any financial services in or from the DIFC for a period of six years.
As part of their mis-selling, Mses. Chatterbhoj and Nayar provided their clients with materially altered Barclays banking documents which falsely listed the products as enjoying full capital protection when, in fact, they were only conditionally capital protected.
On the basis of the misrepresentations, 10 Barclays clients were induced to invest in products unlawfully marketed by Mses. Chatterbhoj and Nayar. Upon discovery of the mis-selling, Barclays promptly referred the matter to the DFSA and provided compensation to clients who were adversely affected. Mses. Chatterbhoj and Nayar were also terminated from Barclays for gross misconduct.
In addition to mis-selling products to clients, Ms. Nayar also provided clients with altered portfolio statements with inflated redemption values for products she had sold them.
During the course of the DFSA investigation Ms. Nayar attempted to minimise her involvement in the misconduct and obstructed the DFSA’s investigation by knowingly making false and misleading statements to the DFSA.
In addition to the Enforceable Undertakings, the DFSA imposed an administrative censureadministrative censure against Ms. Nayar for knowingly obstructing the DFSA during the course of an investigation. The censure is made under provisions of the Regulatory Law and is filed as part of DFSA’s public record.
David Knott, DFSA Chief Executive, stated: “One of the primary objectives of the DFSA is to protect investors who deal with DIFC financial firms. These two individuals betrayed the trust of Barclays and the clients who were misled. This type of conduct is unacceptable within the DIFC.
The DFSA is also sending a strong message that attempts to obstruct or mislead the regulator will be regarded as a serious offence and result in additional sanctions.”