The Financial Markets Tribunal (FMT) has upheld enforcement action taken by the Dubai Financial Services Authority (DFSA) against Mr Gilles Rollet for serious misconduct, including misleading the DFSA, and has ordered Mr Rollet to pay half of the DFSA’s costs.
Following a three-day hearing in November 2021, on 12 January 2022 the FMT issued its decision upholding the DFSA’s findings and imposing the following sanctions:
· a fine of USD 175,000;
· a prohibition from holding office in or being an employee of certain DFSA-regulated entities; and
· a restriction from performing any function in connection with the provision of Financial Services in or from the Dubai International Financial Centre (DIFC).
Mr Rollet was formerly the Senior Executive Officer and a Licensed Director of La Tresorerie Limited (LT), a former DFSA Authorised Firm, which is now in liquidation.
As publicised in the DFSA’s media release on 1 November 2020, the DFSA took action against Mr Rollet due to multiple breaches of DFSA legislation arising from his knowing involvement in LT providing physical cash to its clients in breach of DFSA Rules (Unlawful Cash Service). The DFSA has previously taken action against La Tresorerie for its wrongdoing.
The Unlawful Cash Service operated between February 2015 and January 2017 and involved:
· the use of false invoices and transferring client money without the clients’ knowledge or consent to unregulated companies outside the DIFC; and
· the transportation of large amounts of physical cash from the UAE to foreign countries, an activity associated with a high risk of money laundering.
Mr Rollet disputed the DFSA’s findings and referred the action to the FMT for review. The FMT is a specialist tribunal, operationally independent of the DFSA, which has its own rules of procedure. The FMT conducts a full merits review of DFSA decisions which are referred to it and determines the appropriate action for the DFSA to take.
The FMT imposed the sanctions on Mr Rollet because it found that he:
· was knowingly involved in the wrongdoing arising from LT’s provision of the Unlawful Cash Service, as described above;
· failed to act with integrity;
· failed to ensure that LT’s business was organised so that it could be managed and controlled effectively and to ensure that it complied with DIFC legislation; and
· provided false and misleading information to the DFSA about his involvement in the Unlawful Cash Service.
The key facts and findings of the case include:
· As a senior banker with over 25 years’ experience, Mr Rollet was well aware of compliance matters, including the increased risks involved in dealing with physical cash;
· Mr Rollet was knowingly and directly involved in the Unlawful Cash Service, including by actively participating in it through the use of his own bank account and delivering large sums of cash to the firm’s clients;
· Mr Rollet signed and used a letter on LT headed paper to support the transportation of large amounts of cash through Dubai airport, which incorrectly stated that the client money being carried was beneficially owned by LT;
· Mr Rollet’s submissions that he was unaware of aspects of the Unlawful Cash Service and relied on others to advise him on its propriety were not accepted. In fact, the FMT found that he knew the detail or deliberately chose not to know some of it, and did not instruct anyone internally or externally to provide advice on the Unlawful Cash Service, probably because he knew the advice would be to stop it, given that it was obviously improperly; and
· Mr Rollet misled the DFSA as to his actions related to the Unlawful Cash Service involving the use of his personal bank account and the delivery by him of physical cash to LT clients overseas.
In confirming the DFSA’s findings of Mr Rollet’s lack of integrity and the need for a restriction, the FMT stated that:
“Mr Rollet, a senior banker, did not need compliance training to know full well that these cash schemes were obviously improper and a potential vehicle for serious crime. This was a brazen disregard of important principles by a senior executive. The financial system only works if its key players are fit and proper and Mr Rollet demonstrated to us that in these matters he was neither. There has been no recognition by Mr Rollet of the seriousness of these matters.”
F. Christopher Calabia, Chief Executive of the DFSA, said:
“The DFSA continues to place a high priority on holding to account senior individuals who are at the centre of wrongdoing by firms. As upheld by the FMT, the DFSA’s action found that Mr Rollet led, was fully aware of and actively participated in LT’s Unlawful Cash Service, leading to over USD 7 million worth of physical cash withdrawals. On being found out, Mr Rollet then sought to deflect responsibility by misleading the DFSA as to his involvement, shifting responsibility to others and portraying the physical cash withdrawals as an insignificant part of LT’s business. This is indefensible.
As the FMT has pointed out, an SEO should be particularly watchful about all matters of regulation, including smaller but high-risk areas of their business. As an experienced financial services professional, Mr Rollet was well aware of compliance matters and, in particular, the risks of dealing with physical cash. The Unlawful Cash Service created client money and financial crime risks that were as obvious as they were unacceptable. Any individual who displays such lack of integrity has no place in Financial Services in the DIFC.”
The FMT's decision can be found on the FMT section of the DFSA website at the link below, or by clicking here.
The detailed reasons for the DFSA’s action against Mr Rollet are set out in the DFSA’s Decision Notice dated 29 December 2020, which can be found in the Regulatory Actions section of the DFSA website.
Information about pending FMT matters, including details of any public hearings, can be found on the FMT section of the DFSA website:
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