Tuesday, October 20, 2020

Tribunal upheld decision to fine and ban Deutsche Bank compliance officer

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Independent specialist the Financial Markets Tribunal (FMT) has upheld the decision by the Dubai Financial Services Authority (DFSA) to fine Anna Waterhouse $100,000 (£76,438, €89,860).

As well as restricting her from being involved in providing financial services in or from the Dubai International Financial Centre (DIFC).

Waterhouse was previously head of compliance for the DIFC branch of Deutsche Bank covering the Middle East and North Africa.

She was authorised by the DFSA as the bank’s compliance officer and money laundering reporting officer.

‘Wreckless’

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Following an investigation, the DFSA found that, on several occasions from 1 January 2011 to 21 January 2014, Waterhouse gave false or misleading information to the DFSA.

This was confirmed by the FMT’s decision of 12 August 2019.

In particular, the FMT found that she repeatedly told the DFSA that the bank’s private wealth management (PWM) team only referred prospective clients to other offices of Deutsche Bank and did not provide them with any financial services.

Waterhouse was “reckless as to the truth of these statements and ignored signs that breaches were occurring”.

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As a result, she “did not correct the position over an extended period of time”, which meant that failures in the bank’s “client take-on and anti-money laundering processes were concealed from early 2011”.

True extent

The FMT found Waterhouse knew of the “true extent” of PWM’s activities by November 2011 at the latest, and did nothing to communicate that to the DFSA until late 2013.

The independent tribunal also found Waterhouse “did not deal with the DFSA in an open and cooperative manner or disclose, appropriately, information of which the DFSA would reasonably expect to be notified”.

It concluded that Waterhouse “lacked integrity and was not a fit and proper person to perform functions in connection with financial services in or from the DIFC”.

The FMT said in its decision: “It is difficult to overstate the crucial importance to the well-being of financial markets that all those who accept positions as Authorised Individuals act with integrity and deal frankly and openly with the Regulator.”

‘Misled’

Bryan Stirewalt, chief executive of the DFSA, said: “It is fundamental that all Authorised Persons are open and honest with the DFSA.

“The penalty in this case reflects the fact that Waterhouse not only failed to be open and honest with the DFSA, but recklessly misled the DFSA over an extended period of time.”

Waterhouse subsequently applied to the DIFC Courts for permission to appeal against the FMT’s decision.
On 12 December 2019, Waterhouse’s application was refused and she was ordered to pay the DFSA’s costs in relation to the application for permission to appeal.

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