E*Trade Financial Corp, the online U.S. broker, is closing its Dubai branch, just months after it was fined in the emirate for breaching anti-money laundering controls, it said Tuesday.
“We made a business decision to close the branch in Dubai as the current and projected opportunity does not support the investment required to maintain a local branch,” Susan Hickey, E*Trade’s senior vice-president for corporate communications told Reuters in an e-mailed statement.
“We have fewer than 400 customer accounts in Dubai. We have 2.7 million brokerage accounts globally so it’s immaterial to our business,” she said.
It has not yet been decided when the firm’s office in the Dubai International Financial Centre (DIFC) would close, but she added it was working towards a “smooth transition”.
Account holders informed
The company has sent an e-mail to account-holders saying: “We write to inform you that the Dubai International Financial Centre branch of E*Trade Securities Limited is in the process of being closed.?This development does not require you to take any action as you will be able to continue using your E*Trade account in the same way as you have done previously.”
The e-mail gives new contact details to be used by customers from next Monday. It says requests for administrative help should be sent to the E*Trade Securities office inJersey City, theUS, and any complaints should be sent to the company’s UK office in London.
In May the Dubai Financial Services Authority (DFSA), which is the regulator for the?Nasdaq?Dubai bourse, said it fined E*Trade $200,000 for breaching anti-money laundering controls.
The regulator fined the firm for failing to obtain sufficient evidence of its clients’ source of wealth and for not providing adequate address details for some of its clients.
The DFSA also said E*Trade had failed to implement adequate policies to “address the need to assess the money-laundering risk of its clients”.
The company tried to rectify the situation by asking customers to supply more documents, but 1,196 investors failed to do so and their accounts were closed.
This move indicates that it will now drop its presence in the region. But going by the words of Ms. Hickey, if their total customer accounts inDubaiwere less than 400, then closing offices would not have a larger scale impact.
E*Trade enables online customers in the Middle East to buy and sell shares, bonds and funds listed on major US markets, including the New York Stock Exchange and Nasdaq.
E*Trade Financial Corporation reported 2nd quarter 2011 earnings of $0.17 per share on 07/20/2011. They are expected to report Q3 2011 results on October 19, 2011.
Sources: Reuters, National, businessweek