The Dubai Financial Services Authority has imposed a financial penalty on Morgan Gatsby for multiple serious breaches of DFSA legislation.
The firm described itself as a “diversified financial services group based in Dubai”.
It offered investment banking, wealth management and corporate advisory services to high net worth individuals, family offices and small to medium-sized business in the region.
It has to pay $246,558 (£187,560, €220,744), which includes a 30% settlement discount.
Bryan Stirewalt, chief executive of the DFSA, said: “[Morgan Gatsby] has had a history of not complying with the legislation administered by the DFSA, even after the DFSA warned [the firm] of its concerns.
“The DFSA has no tolerance for recalcitrant firms that continue to breach the DFSA’s legislation, despite repeated warnings.”
Multiple failures
The wealth firm’s licence was suspended for 12 months on 8 November 2018 due to concerns regarding its non-compliance, although this was not made public until February 2019.
In followed an investigation by the DFSA, which found that Morgan Gatsby:
- Illegally promoted an unregulated foreign fund;
- Made unauthorised transactions on behalf of two clients and engaged in misleading and deceptive conduct in regard to those transactions;
- Failed to comply with certain restrictions on business and dealing with property imposed by the DFSA in May 2018;
- Failed to properly classify a client and conduct the requisite inquiries into a client’s source of funds and rationale for entering into transactions;
- Failed to comply with DFSA rules relating to the safe custody of client assets; and,
- Failed to ensure that its board of directors was provided with accurate information.
Shut up shop
Morgan Gatsby had the option to appeal the suspension by referring it to the Financial Markets Tribunal (FMT).
But the company opted not to do so.
According to the DFSA notice, published on 6 January 2020, the wealth management firm’s shareholders passed a number of resolutions at an ordinary general meeting on 13 December 2018.
These included making an application for the withdrawal of its licence and liquidating the company.
The Dubai International Financial Centre (DIFC) currently lists Morgan Gatsby as “in liquidation”.
Morgan Gatsby, formerly known as Sidra Capital, is owned by Essel Group ME (EGME); a business conglomerate operating across a range of sectors including media, entertainment, infrastructure, precious metals and finance.
