DFSA warning on fraudulent emails

The DFSA issues scam warnings, announces restrictions against financial advisor.

The Dubai Financial Services Authority (DFSA) yesterday issued two warnings on scams in response to fraudulent emails purported to be from the Dubai International Financial Centre governor Abdullah Saleh, and from Hussain Al Qemzi, a member of the DIFC’s board.

The first scam email was sent from Gmail and zbavitu.net email addresses, purporting to originate from Mr Saleh.

The emails claim that the DIFC is looking to expand and relocate its business outside Dubai across a number of sectors. The emails offer to provide finance for any private sector projects outside the Arabian Gulf region, in the form of a five-year “renewable” loan with an annual interest rate of 3 per cent.

The second scam was sent from a Gmail address purporting to originate from Mr Al Qemzi. The emails offered loans of US$50 million to interested parties for 10 years “renewable duration” at an annual interest rate of 6 per cent. Interested parties were asked to pay a fee of £5,500 (Dh32,471) for facilitating the loan.

The email attachment contained sample loan agreement documents bearing the DIFC logo and letterhead.

The DFSA strongly advised all recipients of such emails not to respond to their invitations, and under no circumstances to send the originators any money. The authority further stressed that neither Mr Saleh nor Mr Qemzi communicate via the email addresses listed. Yesterday’s announcements bring to 11 the number of scam alerts issued by DFSA so far this year.

Separately, the DFSA, in the past three weeks, has taken disciplinary action against errant workers in the financial sector. On Monday it had placed a restriction on a former financial adviser of a DIFC-authorised firm, “for unethical conduct when he was advising clients about the value of their investment portfolios”.

He is barred from operating in the DIFC for six years.

The DFSA said he “engaged in misleading and deceptive conduct, in relation to investments, by providing two Dubai-based clients falsified portfolio account statements which indicated that the value of their portfolios were significantly greater than their actual value”.

The DFSA also imposed a fine of Dh27,525 on a private banker for overstating the wealth of a client in 2009.

Another private banker found guilty of defrauding a client was banned from working in the DIFC for six years, and fined Dh73,400.

These announcements, however, do not represent a stricter approach to regulation, the authority said.

“Because of their complexity investigations take quite some time to complete,” a spokeswoman said in an emailed response to questions.

“It just so happens that several DFSA investigations are coming to a conclusion at about the same time. There are no definitive trends emerging in enforcement outcomes. However, some of the recent disclosures by the DFSA relate to financial advisers who have acted dishonestly.”