The Dubai Financial Services Authority (DFSA) has searched the offices of hedge fund startup Magellan Capital following allegations from a former trader that a senior executive concealed investment losses and discouraged internal risk reporting, according to a report by Bloomberg.

The report cites unnamed sources familiar with the matter, DFSA officials inspected company laptops and phones and interviewed employees in May as part of the unannounced search. The regulator has not confirmed whether a formal investigation is underway and declined to comment.

The move follows complaints filed by former trader Britney Lam, who left Magellan late last year, alleging regulatory breaches by Senior Executive Officer Ahmed Omar. Lam claims she attempted to escalate her concerns internally multiple times before resigning.

Magellan, which plans to launch with $700m in proprietary capital backed by a wealthy Middle Eastern family, denies all allegations. The firm stated that it maintains strong governance frameworks, independent audits, and full oversight by its beneficial owners.