The Dubai Financial Services Authority (DFSA) confirmed on Thursday that its enforcement action against the former chairman and senior executive officer of MAS Clearsight has been put on hold, pending the outcome of a Financial Markets Tribunal (FMT) review.
On 18 July 2019, the DFSA censured Mubashir Sheikh for breaching its legislation, saying that he:
- Demonstrated a lack of integrity by acting dishonestly and deceptively;
- Provided false, misleading or deceptive information to the DFSA; and,
- Caused MAS to breach the DFSA’s prudential rules.
An update from the DFSA on 3 October, however, stated that it was referred to the FMT on 22 August.
“The DFSA’s decision to take action against [Sheikh] is therefore provisional, as it may be confirmed, varied or overturned as a result of the FMT’s review,” the watchdog said.
No hearing date has yet been set.
15 cheques
MAS Clearsight marketed itself as an investment banking, wealth management, asset management and aviation advisory firm.
The DFSA suspended its licence in 2015 and directed it to pay compensation of $3.2m (£2.6m, €2.9m) to 20 investors.
The firm had marketed investment opportunities in the production of limited-edition publications, with investors told they would be repaid 100% of their initial investment plus a 50% return at minimum.
According to the DFSA’s July 2019 decision notice, Sheikh assumed sole control of the firm’s bank account and withdrew $512,457 using 15 cheques between May and June 2015.
The result was that MAS Clearsight’s liquid assets fell significantly below the level required under the DFSA’s prudential rules.
A provisional liquidator was appointed in November 2015.
Financial penalties
Sheikh, who owned 80% of MAS, is accused of concealing the withdrawals and misrepresenting the company’s financial position to the regulator.
If the FMT review finds in favour of the DFSA, Sheikh would have to pay back the $512,457 plus interest of $101,771.
He would be fined $400,000 and banned from working in the Dubai International Financial Centre (DIFC) indefinitely.
