WealthTek LLP ordered to cease operations
Summary
The FCA has taken action to protect consumers after identifying serious regulatory and operational issues at WealthTek Limited Liability Partnership (WealthTek).
The FCA has initiated a regulatory and criminal investigation into both WealthTek and its principal partner John Dance over potential regulatory breaches relating to client money and custody assets and the criminal offences of fraud and money laundering.
WealthTek is an FCA-authorised and regulated wealth management firm which provided discretionary, advisory, and execution-only services to retail clients and intermediaries. It did not, however, have permission to hold client money or custody assets.
The FCA required the firm to cease operations on 4 April while it examined suspected regulatory breaches concerning client money and custody assets. It then sought to protect customer assets by instigating an insolvency procedure and securing High Court approval on 6 April 2023 to put the firm in special administration.
The FCA obtained a worldwide order to freeze assets belonging to Dance up to the value of £40m so as to preserve assets which might potentially be available for distribution or confiscation upon the conclusion of any civil or criminal proceedings. The regulator noted that, whilst this order restrains and prevents Dance from dissipating any of his identified assets, it does not preclude him from claiming reasonable living expenses or continuing to operate other unrelated business.