Bahrain’s CBB warns public not to deal with unlicensed bank

Bahrain’s financial regulator has warned the public against dealing with a fraudulent institution named United Investment Bank.

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The Central Bank of Bahrain (CBB) yesterday said United Investment Bank is a fraudulent unlicensed institution which claims to be a provider of asset management, brokerage and investment banking services in the kingdom.

Warning consumers against dealing with unlicensed financial institutions that market investment in securities in the country through short messaging services (SMS), telephone calls and websites as is the case with United Investment Bank, which operates through www.almuthidbank.com/, the regulator said the activity of promoting financial services to residents in Bahrain falls within the scope of regulated financial services in accordance with the Central Bank of Bahrain and Financial Institutions Law of 2006.

The CBB told the GDN that the fraud was discovered due to an investor complaint.

The firm was running the scam by contacting individuals and marketing services in asset management, brokerage and investment banking, it said.

An investor lost money to the fraud and the CBB is currently examining the magnitude of the case.

Yesterday’s warning by the regulator is the third within the last 30 days, each about a different bogus entity.

On June 28, the CBB issued an alert about scammers posing as representatives of the Cyprus Securities and Exchange Commission (CySEC).

Investors were approached and asked to pay fees in exchange for help in settling compensation claims against businesses under CySEC’s supervision, the regulator said.

In that scam, contact was often via emails which appeared to be genuine – they carried the name, address, official stamp and logo of CySEC and fraudulently copied CySEC officials’ signature.

False promises were made to assist them in claiming compensation for potential damages in connection with dealings they have had with firms, such as online trading platforms offering speculative investment products.

On June 19, Bahrain’s banking regulator issued a warning against dealing with a fraudulent institution named National Investment Bank.

Like United Investment Bank, the fraudulent entity claimed to be licensed by the Central Bank of Bahrain (CBB) to undertake trading services, post trade services, depositing certificate of shares and market information services.

Calling on consumers to ensure the utmost care and caution, the CBB yesterday said they must take into consideration

“the risks, when investing, dealing or trading any amounts in securities or foreign exchange with any person, persons, institutions, companies or websites, including social media, and ensuring that they hold the necessary licences from the CBB to engage in such activities”.

The regulator also urged consumers to verify the authenticity of market intermediaries through the register of licensed financial institutions on the CBB website (www.cbb.gov.bh).