David John Gillespie, managing director of Pritchard Stockbrokers, has been disqualified for eight years for causing his firm to both mislead the Financial Standard Authority and to trade in breach of financial rules and regulations regarding the use of client monies.
As a result, losses to clients have been estimated at £2.9m, according to The Insolvency Service.
In addition, the company’s financial director, David Alan Welsby, has been disqualified for six years for the same reasons.
Both Mr Gillespie and Mr Welsby were fined and banned, with the firm censured by the FSA’s replacement the Financial Conduct Authority, on 9 October 2014, for serious failings in relation to the protection of client money.
In Mr Gillespie’s case, for the purpose of the disqualification undertaking, he did not dispute that he also caused or knowingly allowed the company to give unsuitable advice to a client, leading to a £235,000 loss to that client.
This regarded an investment in a company, of which Pritchard Stockbrokers itself was a shareholder.
The disqualifications, from 3 and 2 December this year, prevent Mr Gillespie and Mr Welsby respectively, from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of their disqualification terms.
David Brooks, group leader at The Insolvency Service, said although there was no evidence of personal benefit by either Mr Welsby or Mr Gillespie, their actions in such a highly regulated industry, resulted in shortfalls in client funds to continue from at least 2008.
“They have asserted that such a breach of the rules was covered by facilities offered by two companies associated with the company secretary.
“However, the evidence filed at court showed that one set of guarantees were not compliant with either the financial regulations, or the company’s own legal advice,” he stated, adding that the second facility was never formalised in any legal sense.
“Regarding Mr Gillespie, he is also responsible for a failure of Pritchards’ duties to a particular client, who has lost a considerable sum as a result of a clear conflict of interests,” said Mr Brooks, noting that as an experienced member of the financial services industry, he should have taken steps to avoid such a conflict.
Pritchard Stockbrokers latterly traded from its headquarters in Bournemouth, but also provided services through a branch network with agency branches in London, Norwich, Poole, Nottingham, Bristol, Cardiff, Swansea, Woking and Colchester.
The firm went into special administration on 9 March 2012 with an estimated deficiency of £3.9m.
peter.walker@ft.com
