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21 Dec 2015, 12:12 pm

DFSA Censures MAS Clearsight and Directs it to Compensate Investors

The Dubai Financial Services Authority (DFSA) has censured MAS Clearsight Limited (MAS) and directed MAS to pay compensation of USD3,200,000 (AED12,044,800) to 20 investors for contravening DFSA's Law and Rules. Had it not been for MAS' financial position and the DFSA's decision to require MAS to pay compensation to the investors, the DFSA would also have imposed a financial penalty on MAS.

In June 2015, the DFSA suspended MAS' DFSA License to stop it from conducting any Financial Services in the DIFC

During 2010 to 2011 MAS marketed investment opportunities in the production of limited-edition publications. MAS told investors they would be repaid 100% of their initial investment, plus a further minimum return of 50% of their total investment. In fact, the publications have not been produced and the investors have not been repaid the amount of their initial investment or the returns they were promised. In July 2013, some of the investors complained to the DFSA about their investments through MAS.

The DFSA investigated the matter and found that MAS had promoted a Collective Investment Fund in a manner that did not comply with the applicable Laws and Rules. In addition, the investors were not properly treated as clients by MAS and were thereby excluded from receiving the other protections they were entitled to under the DFSA's regulatory regime.

Mr Ian Johnston, Chief Executive of the DFSA said: "The DFSA's Laws and Rules provide important protections for investors. These protections are designed to ensure that investors are fully informed about the investments they make and that the investments are suitable for them. As this action against MAS shows, the DFSA will take appropriate action against anyone who fails to provide investors with the required regulatory protections."

MAS initially challenged the DFSA's Decision Notice and referred the decision to the Financial Markets Tribunal (FMT), which is empowered to review decisions made by the DFSA. However, on 19 November 2015 the DIFC Courts ordered a liquidator to be appointed to MAS. The liquidator decided not to proceed with the challenge against the DFSA's decision. Accordingly, the FMT dismissed the appeal thereby confirming that the DFSA's Decision Notice remains in effect

Copies of the FMT's Decisions in this matter will be published on the FMT's website in due course.

A copy of the DFSA's Decision Notice can be found in the Public Register on the DFSA website under Regulatory Actions:Your-Resources/Public-Register#Regulatory-Actions


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