Dubai Regulator Restricts Trader for Hiding $11 Million Losses

  • Noyan Ahyan inflated value of trading book by $11 million
  • Regulator did not take any action against the company

The regulator of Dubai’s financial free zone imposed restrictions on Noyan Ahyan, a former trader at an unnamed company at the Dubai International Financial Center, for inflating the value of his trading book by $11 million to conceal losses.

The Dubai Financial Services Authority imposed the restrictions after investigations found Ayhan “falsified internal firm records on at least 163 occasions from May to July 2014, by entering false prices in the records," it said in a statement posted on its website. This led to overstating his trading profit or concealing his losses by about $11 million (40.4 million dirhams), a practice known as “mismarking,” it said.

DFSA didn’t take any action against the company, which it didn’t identify, and may consider varying or revoking restrictions on Ayhan after six years if he applies, it said.

The Dubai International Financial Center, set up in 2004, has its own independent regulator and court and is home to the regional offices of global banks such as JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc. The regulator has been clamping down on wrongdoing and last year fined Deutsche Bank AG $8.4 million for how it booked clients at its wealth-management unit. Earlier this month it fined two individuals $56,000 each.

Nahyan ‘‘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," the DFSA said. He did so to avoid the firm’s internal controls and conceal his mismarking and denied any wrongdoing when the firm questioned him, despite the firm having presented him with evidence, it said.

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