Directors arrested after unregulated fund goes bankrupt

Directors arrested after unregulated fund goes bankrupt


Two directors of an investment firm have been arrested and its permission removed by the FSA following claims by investors that the firm had defrauded them out of £20 million, according to reports in IFA Online.  

Investors alleged that the SIPP provider firm, HD Administrators (HDA), had promoted investment into an unregulated collective investment scheme (UCIS), Arck LLP, which funds property investment in Cape Verde and Canada.

But Arck LLP, which shared the same directors as HDA, went into administration earlier this year and along with it, investor’s cash.

Investors have alleged that the firm misappropriated their funds, and through false bank statements misrepresented the health of Arck LLP, reported IFA Online.

The regulator has taken action after it was revealed that an administrator and trustee at HDA, Katheryn Clark, was also a director of Arck LLP.

Clark was later arrested on suspicion of fraud by false representation and money laundering for her part in providing the false accounts for Arck LLP, which according to the FSA’s investigation valued the fund at £13,750,000 instead of its actual £25.90 balance.

Further detailing the regulator’s action, IFA Online conveyed the FSA’s comments: "Clark, on behalf of HDA, failed adequately and regularly to calculate the value of assets held within the HD personal pension scheme."

"This may have resulted in significant overpayments being made to customers with the consequence that such customers may incur subsequent unauthorised payment or tax charges when taking their pension benefits in breach of tax and/or pension legislation."

Another director of HDA, Richard Clay, was also arrested along with Clark for his part in the scandal. 

Leave a comment