Abu Dhabi authorities have announced a hefty fine of Dh449,881 imposed on Sarwa Digital Wealth, an online investment and trading platform, for offering securities without an approved prospectus. The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) found Sarwa in violation of regulations, leading to the penalty.
According to FSRA investigations, Sarwa offered an investment opportunity related to shares of its parent entity to clients and registered users between April and May 2023. This offering, however, lacked a necessary prospectus approved by the FSRA, depriving potential investors of essential information.
A total of 144 investors subscribed to the offer, committing approximately $2.1 million. In response to the violation, Sarwa took action by reversing all committed subscriptions upon notification from the FSRA and settled the penalty immediately to avail of a discount.
In addition to the fine, the FSRA has instructed Sarwa to review its governance arrangements. Emmanuel Givanakis, CEO of the FSRA, emphasized the importance of investor protection, stating, “This enforcement action demonstrates the FSRA’s robust regulatory approach to its regulatory framework, ensuring investor protection is of paramount importance and making sure all regulated entities maintain high standards of conduct.”
The investigation was conducted in coordination with the Dubai Financial Services Authority (DFSA), which looked into a related licensed firm in the Dubai International Financial Centre.
