DFSA fines former licensed directors

Monday, May 09, 2016

Dubai: The Dubai Financial Services Authority (DFSA) has fined two individuals $56,000 (Dh205,520) each for failing to act with due skill, care and diligence, which caused the firm to breach DFSA’s Anti-Money Laundering (AML) rules.

Raphael Lilla and Kapparath Muraleedharan were both licensed directors and members of the Board of Directors at a DFSA authorised firm.

In August 2014, Lilla and Muraleedharan instructed the firm’s senior executive officer and the Compliance and Money Laundering Reporting Officer to open three accounts for clients, which had been assessed as “high risk”, DFSA said in a statement on Monday.

Under the DFSA’s AML Rules, the firm was required to carry out enhanced customer due diligence on these clients before opening the accounts. However, Lilla and Muraleedharan dismissed the advice from the senior executive officer and the compliance and money laundering reporting officer that opening the accounts without the completion of enhanced customer due diligence would contravene the DFSA’s AML rules.

Lilla and Muraleedharan accepted responsibility for their actions and agreed to settle the matter at an early stage following the conclusion of the investigation. The DFSA therefore reduced the fines by 20 per cent under the DFSA’s policy for early settlement.

Ian Johnston, Chief Executive of the DFSA stated: “Lilla and Muraleedharan were given clear advice that opening the accounts without completing the required due diligence would contravene the DFSA’s rules. They ignored this advice and caused the accounts to be opened, which put the firm in breach of its regulatory obligations. The DFSA considers their actions to be serious and expects a higher standard of behaviour from persons in such senior positions.”

Staff Report