The Qatar Financial Centre Regulatory Authority (QFCRA) has commenced legal action in New York against First Abu Dhabi Bank (FAB) to compel the lender to pay a fine linked to market manipulation.

The regulator has compelled the UAE lender to pay a QAR200m ($55m) fine imposed by the Civil and Commercial Court (QFC Court) in the Qatar Financial Centre (QFC).

In March 2018, the watchdog alleged that FAB made illicit foreign exchanges in Qatari Riyal, Qatari Government securities and related financial instruments.

Last year, the QFCRA first imposed the fine against FAB for recovering the amount from assets it withheld.

The legal proceedings began after the lender failed to pay the penalty and for obstructing QFCRA’s investigation into a suspected market manipulation.

Under this investigation, FAB was required to provide the related trading documents, which it failed to present.

As a result, QFCRA began legal proceedings in the QFC Court to mandate the bank to provide the required information.

FAB appealed this decision but it was dismissed in May last year.

FAB also tried to close its QFC branch and withdraw from the financial centre, which further led to obstruction of the QFCRA’s investigation.

It was held in contempt of court in September 2019, for repeatedly refusing to comply, violating the court order, and obstructing the watchdog’s investigation.

QFCRA said: “The financial penalty reflected the gravity and seriousness of the breaches of regulatory requirements by FAB, which deliberately obstructed the QFCRA’s investigation and had a harmful impact on the QFC.

“Following application by the QFCRA and in accordance with the QFC’s regulations, the QFC Court ruled that the assessment of QAR200m was to be converted into an ordinary judgment debt payable to, and recoverable by, the QFCRA. FAB has failed to make the required debt payment despite its legal obligation to do so.

“The QFCRA’s action demonstrates that the QFCRA will not hesitate to take all measures necessary to protect the integrity and reputation of the QFC as a leading financial and business centre and to remedy all harms to the QFC caused by unethical conduct.”