Grimes was senior executive officer of CDL, which was restricted under DFSA rules from intermediating insurance contracts outside of the DIFC, unless the contract was for re-insurance.
The firm, which still operates from the freezone, targets expats and provides life & disability, health, property & liability, auto, and commercial insurance products.
Following concerns that individuals based in the UAE could buy these products direct from CDL’s website, a DFSA investigation found that Grimes had knowledge of, and was involved in, selling outside the DIFC; failed to ensure that CDL complied with legislation in the free zone; and misled the regulator.
Between January and July 2014, CDL intermediated 21 insurance contracts for individuals and companies that were found to be in breach of its permissions.
The company was separately fined $85,191 by the DFSA in 2016.
Can’t pay, won’t pay
In May 2017, Grimes was hit with a $52,500 (£39,573, €45,493) penalty and banned from providing financial services in or from the DIFC.
While he did not challenge the DFSA’s findings, Grimes also did not pay the money.
In 2018, the DFSA lodged proceedings in the DIFC courts to enforce payment, which was granted in May that year.
Subsequent failure to pay forced the DFSA to pursue Grimes through the UK courts, resulting in payment finally being made in January 2019.
Wayne Jones, a partner at Dubai-based law firm Clyde & Co, told local newspaper The National: “This is the first time the DFSA appears to have successfully pursued someone outside the country for a fine that they have imposed as a result of a regulatory breach.”
Suffer the consequences
Bryan Stirewalt, chief executive of the DFSA, said: “The DFSA ensures that there are real and significant consequences for firms and individuals not complying with our rules while operating in or from the DIFC.
“We are committed to our statutory objectives and will take all available and appropriate steps to rigorously enforce any fine we have imposed on a person, regardless of the location of the person or the person’s assets.
“By doing so, the DFSA seeks to protect direct or indirect users or prospective users of the financial services industry in the DIFC and deter similar breaches by other individuals or firms.”