The FSA has confirmed that Pritchard Stockbrokers has entered the special administration regime and Timothy Ball, Roderick Weston and Alistair Wood at Mazars LLP have been appointed joint special administrators.
Last month, Merchant Capital appointed Reyker Securities to handle client monies in its structured products division to replace Pritchard Stockbrokers after it was suspended by the FSA and told not to carry on any regulated activities by the FSA.
WH Ireland took charge of assets, but not money, belonging to the majority of Pritchard’s customers last month.
The FSA says in the near future former Pritchard customers will be able to start dealing again through WH Ireland. WH Ireland is in the process of informing customers of timings. The joint special administrators will review the client cash holdings positions and will return as much cash as possible directly to each client.
When suspending Pritchard, the regulator said it had serious concerns about the way it has been running its business and handling investor money, and that Pritchard had failed to adequately protect investor money and used it instead to meet its own costs.
In a letter to investors last week, seen by Money Marketing, Merchant Capital confirmed some investors’ income payments have been delayed due to the FSA suspension and that “some residual client cash holdings” at Pritchard will remain frozen.
The letter says: “Any delayed income and surrender payments will be processed shortly and once the transfer is complete, future income and maturity payments will be paid as normal… There are some residual client cash holdings at Pritchard that will remain frozen and the FSA is working with Pritchard to understand the position with regard to these client money holdings.”
Merchant House refused to comment on the amount of cash frozen or the number of clients that are affected.
Glasgow Rangers’ boss Craig Whyte is company secretary and minor shareholder of Pritchard Stockbrokers and owns Liberty Capital a venture capitalist firm registered in the British Virgin Islands which owns 18.2 per cent of Merchant House Group.
Customers of Pritchard should contact the joint special administrators for more information.