The Dubai Financial Services Authority (DFSA) announced today that it has imposed a restriction on Mr Noyan Ayhan, a former trader at a DFSA Authorised Firm, after he inflated the value of his trading book by around USD 11,000,000 (AED 40,425,000) to cover up losses.
The DFSA imposed the restriction because it found that Mr Ayhan’s misconduct demonstrated that he lacked integrity. As a result, the DFSA concluded that he is not fit and proper to perform any functions in connection with the provision of Financial Services in or from the Dubai International Financial Centre (DIFC).
The DFSA’s action follows an investigation which found that, while a trader at a DFSA Authorised Firm (the Firm), Mr Ayhan:
• falsified internal Firm records on at least 163 occasions from May to July 2014, by entering false prices in the records. The effect of this was to overstate his trading profits or conceal his trading losses by approximately USD 11,000,000 (AED 40,425,000) – a practice known as “mismarking”;
• colluded with traders on a Turkish market to "mark the close" on the last trading day of the month in April, May and June 2014, by creating closing prices that would match his mismarks. He did so to avoid the Firm’s internal controls and conceal his mismarking;
• instructed a subordinate employee to enter false daily marks on one occasion while Mr Ayhan was out of the office; and
• denied any wrongdoing when the Firm questioned him, despite the Firm having presented him with evidence showing that he had mismarked the Firm’s records. The Firm carried out an internal investigation and found that Mr Ayhan acted dishonestly and committed gross misconduct under the Firm’s codes of conduct. The Firm notified the DFSA of the misconduct, and co-operated fully with the DFSA’s investigation. The DFSA has not taken any enforcement action against the Firm.
Mr Ian Johnston, Chief Executive of the DFSA said: "The DFSA expects employees of Authorised Firms in the DIFC to act with integrity when performing their duties. Mr Ayhan was a senior and experienced trader who held a position of trust at the Firm. Mr Ayhan’s actions in deliberately mismarking his positions and engaging others in his misconduct fell far short of the DFSA’s expectations."
After a period of six years, the DFSA may consider varying or revoking the restriction on application by Mr Ayhan.