Dubai: German financial group Deutsche Bank has been fined a whopping USD 8.4 million by Dubai's top regulator for committing "serious contraventions" in its dealings.
The fine is the result of a long-running dispute between the Dubai Financial Services Authority (DFSA) and Deutsche Bank AG (DBDIFC) relating to events beginning in 2011.
The DFSA said the fine had been imposed for "serious contraventions" relating to the bank's internal governance, client take-on and anti-money laundering processes.
"Those contraventions include misleading the DFSA, failures in DBDIFC's internal governance and systems and controls and in its client take-on and anti-money laundering processes," a DFSA statement said yesterday.
The DFSA's action follows an investigation into DBDIFC which focused on its activities from January 2011 to January 2014.
"The DFSA was initially concerned that DBDIFC had failed to properly classify some of its customers as Clients under DFSA Rules and, therefore, deprived them of certain protections under the DFSA's regulatory regime. However, over the course of the investigation, it became clear that there were wider failings at DBDIFC," it said.
DBDIFC provided false information to the DFSA on several occasions about the nature and scope of activities undertaken by PWM.
"The provision of false information to the DFSA is a serious matter. One of the pillars of the DIFC regulatory framework is that Authorised Persons must deal with the DFSA in an open and co-operative manner and must disclose appropriately any information of which the DFSA would reasonably be expected to be notified," Ian Johnston, Chief Executive of the DFSA said.
He said the DFSA expected firms to have governance structures and systems and controls in place which encourage compliance with its rules and which promptly identify and remedy any regulatory failings.
"As demonstrated by the action against DBDIFC, the DFSA will take a robust stance where firms or individuals have breached these obligations," Johnston said.
"Had DBDIFC cooperated at an early stage of the investigation, the matter would have been resolved far sooner and at significantly less costs to both the DFSA and the firm. The fine imposed in this case reflects the seriousness with which the DFSA views these failings," he added.
