WealthTek Limited Liability Corporation - Case Update
The joint special administrators of WealthTek have revealed that the Newcastle-based wealth management firm operated with a significant shortfall in client assets for a prolonged period.
WealthTek was placed in special administration on 6 April following an urgent application made by the FCA after serious regulatory and operational issues came to light. Shane Crooks, Mark Shaw and Emma Sayers of BDO were appointed joint special administrators.
The administrators have been working to review and analyse over a decade of documents to get a better understanding of the inflow and outflow of funds. However, a number of issues with the accuracy of the firm’s books and records have caused concerns over the reliance that can be placed on the company’s documents, leading to complications and delays in returning client money. The joint special administrators have sought advice over these issues which is close to being finalised.
They are working with the Financial Services Compensation Scheme, which confirmed in September that it will compensate eligible clients for losses up to £85,000. They are also working with Norton Rose Fulbright to prepare a distribution plan which will set out the process for returning client securities. Significant work has already been done to determine the best way to deal with the issues caused by the client asset shortfalls and inaccuracies in the firm’s books and records.
The joint administrators’ progress report can be found HERE.