The Cyprus Securities and Exchange Commission (CySEC) today concluded an eighteen-month investigation into Falcon Brokers Limited’s operations. Consequently, the regulator has levied a €195,000 penalty on the directors of the FX brokerage, also calling for a ban of all integral personnel in the group from any activity within the financial space.
These are the latest actions taken against Falcon Brokers Limited, which had its broker-dealer license originally suspended back in September 2015. The suspension from CySEC was handed down due to suspicions of violating rules regarding the handling of client funds – a lengthy investigation followed shortly after.
Today’s announcement represents CySEC’s harshest measures to date against Falcon Brokers, which slapped a collective sum of $222,120 (€195,000) on the company’s leadership. This includes Falcon Broker’s sole shareholder and Executive Director Mohammed Yahya Amin Al Ansari, Executive Director and Senior Manager Marwan El Daouk, as well as independent non-executive directors Khalid Ahmad Emran Abdo and Wael Ata Elayyan Jaber.
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Most of the aforementioned individuals are facing additional recourse with Mr. Ansari (5 years), Mr. Abdo (2 years) and Mr. Jaber (2 years) formally banned from participation in any professional activity in the financial services space.
Demetra Kalogerou, Chair of CySEC, commented: “The senior managers of Falcon Brokers Limited wholly neglected their duties to ensure the Company had the correct measures in place to protect investors, which resulted in serious failings to safeguard client funds.”
“Having limited investor detriment through the suspension and withdrawal of the Company’s license in 2015 and 2016, imposing multiple fines on key persons and banning three directors from regulated activities concludes CySEC’s eighteen-month investigation. As is consistently stated, CySEC will not hesitate to pursue regulatory action against current or former directors should they or their licensed company be found to be in violation of the legislation we consistently enforce,” she added.
Falcon Brokers had originally been given one month to get its operations in order, ultimately facing a cloud of suspicion over the misappropriation of client funds. This culminated in additional action against the group in November 2015, an extension of the suspension of Falcon Brokers’ authorization, preventing any services being offered. As of November 2, 2015, Falcon Brokers was ordered to close all of its client positions.
The group’s license was formally revoked back in March 2016, citing failure to comply with the Cypriot investment firm (CIF) rules required to maintain its license status.