The amount of compensation paid out in claims against stockbroking and wealth management firm Pritchard Stockbrokers by the Financial Services Compensation Scheme has reached £8.5m.
Last week, the FCA fined and banned former Pritchard managing director David Gillespie and finance director David Welsby for serious failings relating to the protection of client money.
The regulator said it would have also imposed a £4.9m fine on Pritchard were it not for the firm’s financial position.
Pritchard entered special administration in March 2012 with a shortfall of £3m in client money. Between July 2010 and February 2012, the firm provided its services to more than 11,000 customers. The FSCS says it has so far paid out £8.5m in compensation in respect of over 2,600 claims against Pritchard.
In July 2013, the FSCS said in its annual report it had paid out £6.5m in claims against Pritchard. The firm was one of several cited by the FSCS as the reason for a £20m interim levy for investment advisers for 2012/13.
In its latest annual report published in July, the FSCS said it was “nearing the tail-end” of claims against Pritchard.