The Financial Conduct Authority has sought and obtained a restraint order against WealthTek’s principal partner, John Dance.
According to the regulator, on November 8 it sought and obtained a restraint order under the Proceeds of Crime Act 2002.
The purpose of a restraint order is to preserve assets to make them available for a future confiscation order, an order which can only be made following a conviction in criminal proceedings.
The FCA has 'replaced' the worldwide freezing order previously in place with the restraint order.
As with the worldwide freezing order, the restraint order allows Dance to claim reasonable living and business expenses.
The British Horseracing Authority remains responsible for matters relating to Dance’s participation in horse racing activities.
The FCA is currently carrying out a regulatory and criminal investigation into both WealthTek and Dance.
At the end of May the regulator froze the assets of WealthTek’s principal partner and launched an investigation after a potential shortfall of £81.4mn in client money was discovered.
At the time, the FCA said WealthTek is an FCA authorised and regulated wealth management firm which provided discretionary, advisory and execution only services to its retail clients and intermediaries. However, it did not have permission to hold client money or custody assets.
Last week, FT Adviser reported that WealthTek had fallen into default with the Financial Services Compensation Scheme but that the body was not yet open to individual claims.
The FSCS placed the firm in default on November 3, seven months after the FCA ordered it to stop running due to "serious" regulatory and operational issues".
amy.austin@ft.com
