A trio of wealth management executives that operated a scheme to help clients game a now-defunct immigration policy — which offered visas to high net worth investors — have been banned by the U.K.’s Financial Conduct Authority (FCA).
The regulator sanctioned three former executives with Dolfin Financial (UK) Ltd. — an investment firm that, the FCA alleged, offered a scheme to foreign investors seeking to establish residency in the U.K.
The scheme sought to take advantage of the U.K.’s former investor visa program by engaging in artificial transactions designed to circumvent the visa rules, in exchange for a £400,000 fee. The program had offered visas to investors that invested a minimum of £2 million in the U.K.
The FCA said that, between 2016 and 2019, the scheme generated at least £35.5 million in fees for Dolfin and related firms, along with immigration agents that referred clients to the firm.
The business “was inherently artificial in that it was comprised of a series of contrived transactions which had no genuine commercial rationale and, when viewed as a whole, it gave a false or misleading impression,” the FCA said in an enforcement action against one of the firm’s former executives.
In 2021, the FCA took action against the firm amid concerns about the investor visa program, among other issues. The firm entered an administration process, which remains ongoing, in mid-2021.
The U.K. government scrapped the investor visa program the following year.
Now, the FCA has taken enforcement action against the firm’s former CEO, Denisz Nagy; its former finance director, Sanjay Maraj; and its co-founder, Roman Joukovski — alleging that they violated the regulator’s principles.
Joukovski is appealing the regulator’s findings to the U.K.’s Upper Tribunal, whereas Nagy and Maraj settled the cases against them.
Nagy was fined £324,800, Maraj was fined £122,000, and both men were also banned from working in financial services. The FCA is also seeking to ban Joukovski in that proceeding.
“Integrity is not optional in financial services,” said Therese Chambers, joint executive director of enforcement and market oversight at the FCA, in a release.
“These individuals ran a scheme designed to get around the U.K.’s investor visa rules, undermining their purpose of attracting genuine investment into the U.K. They then sought to hide how it operated,” she added. “We will continue to act against those who lack integrity and undermine trust in U.K. financial services.”