Dubai regulator fines investment firm AED 1.8 million over compliance issues

The Dubai Financial Services Authority has fined Ark Capital Management Limited (Dubai) $504,000 (over AED 1.85 million) for regulatory breaches.

The DFSA says the firm failed to maintain effective systems to detect and report market abuse.

While Ark had monitoring tools in place, the authority found the firm did not properly review or act on alerts, leading to at least ten suspicious trades being missed or reported late.

Ark also failed to inform the regulator about a proposed change in ownership. Although the change never went through, an investor had acquired a 9.5 per cent stake, with an agreement allowing that holding to rise to as much as 90 per cent once certain conditions were met.

The firm said it believed notification was not required because the initial stake was below the ten per cent approval threshold — a view the DFSA rejected.

Commenting on the case, DFSA enforcement chief Alan Linning said the integrity of financial markets depends on firms being vigilant and transparent.

He stressed that regulated companies must have effective systems to detect market abuse and must promptly report suspicious activity.

Linning also warned that structuring transactions to stay below approval thresholds does not remove the obligation to notify the regulator — especially where agreements could ultimately lead to a change in ownership.