Adviser handed 15-year bankruptcy restriction

Adviser handed 15-year bankruptcy restriction

A financial adviser has been handed the maximum bankruptcy restriction order after he breached the insolvency rules, in what has been described as the worst case of someone disregarding the regime.

Stephen Todd has been handed a bankruptcy restriction order of 15 years after he contravened a previous order by taking up a management position in a limited company. 

A BRO is a legal order from the court which extends the period of time for which you have to follow certain restrictions. This can be for anything from two to 15 years.

The restrictions are the same as the ones you have to follow during the year before you’re discharged from bankruptcy, which state you can't act as a director or get involved with setting up, promoting or running a company without permission from the court.

The order also means you cannot act as an insolvency practitioner or get credit of £500 or more without telling the lender that you have a BRO.

You are also not allowed to carry out a business in a different name from the one under which you were made bankrupt, without stating you have done business with the name in which you were made bankrupt.

On 29 April 2013, Todd was prohibited for 10 years from managing or promoting a limited company.

This ban was put in place because of his conduct as a director of an earlier company, advice firm White Square Investments, which went into liquidation.

Back in 2009, the Financial Services Authority cancelled White Square's permissions because the firm did not have adequate capital resources and failed to rectify the deficit.

However, between 2013 and 2015, Todd breached the bankruptcy ban by acting in the management of IPR Capital Limited (IPR), which was incorporated on February 2013.

IPR went into liquidation in April 2015 with liabilities of over £10m.

The court also found that Todd had failed to tell IPR about the bankruptcy proceedings, and between April 2013 and April 2014, he received at least £517,100 from the firm.

The financial adviser also received payments into his bank account totalling £59,904 between April 2013 and January 2014 from other parties.

In April 2013, his liabilities amounted to at least £454,107 of which £363,607 was due because of unpaid National Insurance contributions, self-assessed tax and penalties.

Registrar Christine Derrett said this was one of the worst examples of someone disregarding the insolvency and disqualification regime.

The regime, she said, exists to protect the public.