The Dubai Financial Services Authority (DFSA) has been successful in closing down a Dubai-hosted website, www.smiequity.com, used to front an unlicenced investment company, SMI Equity, using the UAE as a base address on the website.
The DFSA was alerted to the unlicenced operation of SMI Equity, having received information from an investor in the Czech Republic. The investor had already deposited USD 45,000 into the bank account of SMI Equity and received no response from SMI Equity after the investment was made. The investor contacted the DFSA having seen DFSA’s website warnings, which lists information and past media releases on internet scams and frauds.
While unlicenced, SMI Equity claimed to offer investment opportunities and provide investment advice to prospective customers in Eastern Europe, using a UAE address and P.O. Box. The website was used to encourage investors to invest mainly in pre-IPO securities in the United States.
The DFSA immediately contacted the website host provider in Dubai and arranged to close the website down with immediate effect.
David Knott, Chief Executive of the DFSA said: “The internet has added a fantastic new dimension to our daily lives but has also opened up prospects for criminals to prey on the public.”
Cold calling schemes will increasingly occur in the Middle East, as Dubai and other regional centres expand their capital markets. The DFSA regards awareness of these risks being a matter for constant reminder and public education and we are fortunate that some of the investors in this scam had the good sense to contact the DFSA.
“All investors are advised not to respond to unsolicited telephone calls or emails that ask for money or recommend investments without first checking with a trusted and experienced advisor. Whenever there is any suspicion of foul play, the public should contact the relevant regulators or law enforcement authorities,” Mr. Knott concluded.
The Dubai Financial Services Authority (DFSA) is an independent, integrated regulatory authority responsible for the regulation of all financial and ancillary services conducted in or from the Dubai International Financial Centre (DIFC), including asset management, banking, securities trading, Islamic finance, re-insurance, and an international financial exchange. The DFSA has been created using principle-based primary legislation modelled closely on that used in London and New York, and the DFSA regulatory regime operates to standards that meet or exceed those applying in the world's major financial centres.
The DFSA is a central component of the DIFC, a financial centre established to position Dubai as a recognised hub for institutional finance, and the regional gateway for capital and investment to the Middle East.
Mr. David Knott was appointed Chief Executive of the DFSA on June 1, 2005. He is a former Chairman of the Australian Securities and Investment Commission (ASIC) and was Chairman of the Technical Committee of the International Organisation of Securities Commissions (IOSCO).
