The Financial Conduct Authority has frozen the assets of WealthTek’s principal partner and launched a criminal investigation after a potential shortfall of £81.4mn in client money was identified.
The move follows the announcement in April that the FCA had ordered WealthTek to cease operations.
The regulator is currently carrying out a regulatory and criminal investigation into both WealthTek and its principal partner, John Dance, which includes potential regulatory breaches relating to client money and custody assets and criminal offences of fraud and money laundering.
Although FCA-regulated, WealthTek did not have permission to hold client money or custody assets.
In an update today, the FCA said Dance was arrested on April 4 in connection to the investigation and was later interviewed by the FCA under caution.
It has said further investigations are needed and advised any clients of the firm with concerns to contact the joint special administrators.
Last month the FCA obtained a court order which resulted in a racehorse part-owned by Dance being prevented from competing at Aintree.
While the court order has not been lifted, an update last week means money is being released in order to allow the running of the horse racing business.
The High Court has appointed Shane Crooks, Mark Shaw and Emma Sayers of BDO LLP as joint special administrators of WealthTek.
The regulator has obtained a worldwide order to freeze assets belonging to Dance up to the value of £40mn with the aim of preserving assets which may be potentially available for distribution or confiscation upon the conclusion of any civil or criminal proceedings brought by the FCA.
The FCA said the order restrains and prevents Dance from dissipating any of his identified assets, it does not preclude him from claiming "reasonable living expenses or from continuing to operate his horse business or any other existing business unrelated to the matters featured in the proceedings brought by the FCA to date".
According to the regulator it is working closely with the joint special administrators and is aware of the potential shortfall of £81.4mn in client assets and money associated with WealthTek as of April 6 2023.
WealthTek also traded under the names Vertem Asset Management and Malloch Melville.
jane.matthews@ft.com
