Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a746774

Pritchard’s £3 million shortfall may widen as fresh claims lodged

by Eleanor Lawrie on Apr 17, 2014 at 08:02

Pritchard’s £3 million shortfall may widen as fresh claims lodged

Defunct stockbroker Pritchard, which was acquired by WH Ireland in 2012, faces further ‘significant’ client claims which, if agreed, could increase its £3 million cash shortfall.

Special administrator Mazars said a ‘significant additional’ number of claims, some of which are believed to be substantial, add to existing claims of around £26.5 million, against £23.5 million of pooled client cash Pritchard holds. These were not originally in Pritchard’s records. Mazars said it was investigating these claims in a progress report.

As of last month, around one third of the existing claims against Pritchard’s pool of client money were yet to be compensated. At this point 7,484 clients agreed to settle, while a further 3,726 are still to resolve claims that amount to an estimated £2.8 million, despite the administrator’s attempts to contact them.

A first distribution of 50p in the £1 is being paid to clients whose claims are agreed, but the administrator said it was unable to estimate the timing or size of future distributions until the issues around these additional claims are resolved.

WH Ireland, led by CEO Richard Killingbeck (pictured), has also suspended three lines of stock gained through the acquisition, which will not be transferred to the business. They are understood to be investments in companies that have since been liquidated.

The troubled stockbroker’s book of business was bought by WH Ireland for £500,000 in February 2012, where it acquired assets under management valued at £400 million.

The company said the deal would increase its private client stockbroking clients by approximately 50% and total assets under management by around 25%.

Prior to the acquisition, the then-Financial Services Authority suspended Pritchard from trading after ruling the stockbroker had used client money to cover its own expenses, putting that money at risk.

The financial watchdog also froze Pritchard’s assets, and the stockbroker was told to let its clients know it had been banned from trading. In November 2012, the Financial Services Compensation Scheme said it expected to pay out £16 million in compensation over Pritchards.

WH Ireland was due to pay £300,000, including VAT, to Mazars in August 2012 in accordance with the sale of Pritchard Stockbrokers, the document states, but this payment was disputed by WH Ireland.

Sign in / register to view full article on one page

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Investing for income in a changing environment


With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop

More about this:

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet