Landmark UAE case convicts IFA of working illegally

As Dubai-based expat investors continue attacking a rogue financial advisor, the latest court case acts as a warning to expats in the Gulf States.

It’s the same old story of an illegally working, unprincipled scam artist preying on expats with cash to invest. This particular offender, one Neil Grant, was caught due to his victims raising their case with Dubai’s Office of Public Prosecution. Their complaint was upheld and supported by the Department of Economic Development, with Grant being found guilty of illegally working and fined DH 2,000 just before he hopped a flight back to his native Scotland. His company, Prosperity Offshore Investment Consultants, is no more, but his victims are now doing their best to get revenge and at least some of their money back.

According to one victim, Grant had around 400 clients, some of whom were very wealthy, with concern setting in when investors were informed of widely-fluctuating values in their investments. Given that the majority had requested low-risk investments, further investigation revealed the vast majority were in unregulated, short term, high-risk illiquid funds. Further checks showed Grant wasn’t licensed to give financial advice, and his massive commissions and other charges made him literally hundreds of thousands of dirhams in fees.

Once he’d finally been brought to court, the guilty verdict was a landmark ruling for Dubai, but his troubles aren't over now he's fled back to the UK. More and more of his duped investors are now getting together and launching a civil case in an attempt to recover at least some of their lost cash. The case is being pursued at the same court in which he was convicted, with one British expat saying Grant had dumped her savings into a so-called recycling ‘green earth fund’ which shortly plummeted in value, losing her entire investment. Another victim, an airline pilot living in Dubai, also lost all his savings, with total losses overall expected to be in the many millions of dirhams.

The same sad story is told in expat destinations across the world, with very few duped investors ever seeing even a small proportion of their losses refunded. Later this year, new laws regarding financial advice given to expats in the UAE are to be brought in, including limits on commissions and restrictions on recouping of fees, but expat lawyers are warning investors the upcoming regulations may well spark ‘churning’ – advisors switching clients to different products in order to benefit from yet more commissions.