DFSA Issues Immediate Ban on Former SVS Securities CEO Kulveer Virk

The Dubai Financial Services Authority (DFSA) has imposed an immediate prohibition on Kulveer Virk, blocking him from performing any financial-services-related functions within the Dubai International Financial Centre (DIFC). It is the second time in 18 months that Virk has been barred from the sector.

The DFSA acted upon learning in November 2024 that Virk had begun working at a regulated firm inside the DIFC despite a ban issued five months earlier by the UK Financial Conduct Authority (FCA). The Dubai ban took effect on 9 December and prevents him from holding any role connected to financial services in the jurisdiction.

Virk's regulatory troubles stem from his tenure at SVS Securities, a UK investment firm that collapsed in 2019. Regulators determined that SVS directed £69 million in client pension assets into high-risk bonds, many managed by SVS directors or Virk's own business associates. The FCA found that Virk had designed a business model that prioritized revenue from undisclosed fees - sometimes reaching 12% of client investments - over client interests.

When a number of these bonds later defaulted, many of the firm's 879 affected clients were left expecting to recover as little as 20-35% of their savings. Most had transferred existing pension pots into SVS products.

The FCA's investigation concluded that between 2016 and 2019 Virk repeatedly disregarded warnings about conflicts of interest and regulatory requirements. Among the cited issues was his decision to impose a 10% markdown on client portfolios despite internal objections that such treatment was unfair, which produced £359,800 in revenue for SVS. He also arranged for SVS to receive a £750,000 advance from Innovation Capital Finance Limited (ICFL) before due-diligence was completed, at a time when regulators had already raised concerns about the assessment of fixed-income products. SVS agreed to channel client funds into ICFL bonds in exchange for a £1 million fee.

SVS was placed into special administration in August 2019 after the FCA halted its operations over client-asset concerns. The client book was transferred to ITI Capital, which later exited the retail business altogether after encountering technical difficulties during the migration. The administration process lasted nearly four years, concluding in March 2023. Most clients were ultimately transferred in mid-2020, though eight accounts - five of them corporate - did not receive full compensation because their balances exceeded Financial Services Compensation Scheme limits.

In June 2024, the FCA fined Virk £215,500 and imposed a lifetime ban on his participation in the UK financial sector. Two other former SVS executives - CFO Demetrios Hadjigeorgiou and head of compliance David Steven - received smaller penalties and prohibitions on holding senior positions.