The Dubai Financial Services Authority (DFSA) on Wednesday published Decision Notices taking action against Stuart Coles (Mr Coles) and three related companies of which Mr Coles was the sole owner and director.
The three firms are Coworth Fintech Ltd, Coworth Investments Ltd and Novus Fintech Ltd.
Mr Coles disputes the DFSA’s findings and has referred the decisions to the Financial Markets Tribunal (FMT) for review, where the parties will present their respective cases.
The DFSA’s decision is therefore provisional and reflects the DFSA’s belief as to what occurred and how it considers Mr Cole’s conduct should be characterised, the DFSA said in a statement.
The FMT will determine what, if any, is the appropriate action for the DFSA to take. The DFSA’s decision may be confirmed, varied or overturned as a result of the FMT’s review.
The DFSA imposed a financial penalty of $240,000 (AED 881,400) on Mr Coles. The DFSA has also restricted Mr Coles from performing any function in connection with the provision of Financial Services in or from the DIFC and prohibited Mr Coles from holding office in or being an employee of any Authorised Person, DNFBP, Reporting Entity or Domestic Fund in the DIFC.
The DFSA decided to impose public censures on the three firms involved in this matter.
In April 2021, the DFSA commenced an investigation under the Regulatory Law because it suspected that Coworth Fintech, Novus Fintech and others may have engaged in Financial Service activities in or from the DIFC without being authorised to do so. The DFSA later expanded the investigation to include Coworth Investments which had a trading address and registered office in the UK.
In May 2021, the DFSA visited the offices of Coworth Fintech and Novus Fintech in the DIFC to obtain specified information and documents the DFSA considered relevant to the investigation.
As the sole owner and director of the three firms, Mr Coles instructed the staff not to allow the DFSA to inspect and copy the requested information stored on computers and other devices that were being used at the offices in the DIFC.
Mr Coles did not have a reasonable excuse for his refusal and his failure to comply with the DFSA’s information-gathering requests obstructed the DFSA investigation.
Patrick Meaney, Head of Enforcement at the DFSA, said: “The DFSA will not permit individuals or companies to obstruct lawful investigations. Such behaviour undermines the core objectives of the DFSA and demonstrates that those engaging in this conduct are entirely unsuitable to carry out business in the DIFC. The significant fine imposed on Mr Coles also demonstrates the DFSA will take appropriate action against individuals that are most culpable for misconduct.”