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Deutsche Bank fined $8.4 million for breaches

(Wam)
Filed on April 16, 2015

Those contraventions include misleading the DFSA, failures in DBDIFCs internal governance and systems and controls and in its client take-on and anti-money laundering processes.

Dubai — The Dubai Financial Services Authority, or DFSA, on Wednesday announced that it has fined the DIFC branch of Deutsche Bank, $8,400,000 (Dh30,849,000) for serious contraventions.

Those contraventions include misleading the DFSA, failures in DBDIFC’s internal governance and systems and controls and in its client take-on and anti-money laundering processes.

The DFSA’s action follows an investigation into DBDIFC which focused on its activities from January 2011 to January 2014. The DFSA was initially concerned that DBDIFC had failed to properly classify some of its customers as clients under DFSA rules and, therefore, deprived them of certain protections under the DFSA’s regulatory regime. However, over the course of the investigation, it became clear that there were wider failings at DBDIFC.

The DFSA therefore broadened the scope of its investigation. In particular, the DFSA uncovered that DBDIFC was aware that its Private Wealth Management business, PWM, was operating in breach of DFSA requirements, but did not take adequate steps to address the issue. In addition, certain staff of DBDIFC provided false information to the DFSA on several occasions about the nature and scope of activities undertaken by PWM. The DFSA also found material failings in DBDIFC’s governance and has made directions to DBDIFC to remediate the DFSA’s concerns. Ian Johnston, Chief Executive of the DFSA, said, “The provision of false information to the DFSA is a serious matter. One of the pillars of the DIFC regulatory framework is that authorised persons must deal with the DFSA in an open and co-operative manner and must disclose appropriately any information of which the DFSA would reasonably be expected to be notified.” He added, “The DFSA expects firms to have governance structures and systems and controls in place which encourage compliance with our rules and which promptly identify and remedy any regulatory failings.  As demonstrated by the action against DBDIFC, the DFSA will take a robust stance where firms or individuals have breached these obligations. Had DBDIFC cooperated at an early stage of the investigation, the matter would have been resolved far sooner and at significantly less costs to both the DFSA and the firm.

The fine imposed in this case reflects the seriousness with which the DFSA views these failings.”





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