The Dubai Financial Services Authority (DFSA) has issued a penalty against La Tresorerie over it regulatory filings.
The firm, which is regulated by the DFSA, provides advisory, discretionary, execution-only and custodian services for high net worth individuals, family offices and independent asset managers.
The current senior management of La Tresorerie was not involved in the scheme and they self-reported the firm to the DFSA, as the breaches had been made prior to their arrival at the company.
After an investigation which started in 2017, the watchdog said it found multiple serious breaches of its legislation that stemmed from an illegal cash service the business provided its clients.
The operation went on for almost two years, between February 2015 and January 2017, where La Tresorerie:
- Used false invoices and transferred client money to unregulated companies outside of the Dubai International Financial Centre (DIFC);
- Transported large amounts of physical cash from the UAE to a foreign country, which is associated with a high risk of money laundering;
- Mislead its custodian and a bank about the nature and purpose of certain transactions, when anti-money laundering due diligence enquiries were made; and,
- Demonstrated a fundamental failure to conduct its business with integrity.
Millions in cash
This resulted in a hefty fine totalling $612,790 (£497,269, €565,068), which includes disgorgement of $261,154.
The regulator said it found “more than 100 transactions carried out as part of the illegal cash service, ranging in value from €2,560 to €500,000 (£440,078, $542,227)”.
“The total amount of physical cash provided by La Tresorerie was calculated to be the equivalent of over $7.3m, and the fees the firm received were the equivalent of almost $220,000.
“An amount equivalent to these fees, plus interest of over $41,000, is included in the financial penalty imposed on La Tresorerie as disgorgement,” the DFSA added.
‘Lack of integrity’
The company would have been eligible for a 30% discount on its fine, if it had reached a settlement within the period set out by the regulator; but it didn’t.
Bryan Stirewalt, chief executive of the DFSA, said: “The illegal cash service provided by La Tresorerie was a serious breach of DFSA rules, further compounded by the senior management’s attempts to disguise this business activity.
“This activity demonstrated a clear lack of integrity, and opened the firm up to a high risk of money laundering, as well as placing client money at undue risk.”