FSA Limitations Placed on Pritchard Stockbrokers

[forlanssister 3,061]

Merchant Capital seem to be drip feeding the bad news to their investors how long till they tell them the excrement has well and truly collided with the rotating cooling device ?

 

 

Merchant Capital has confirmed some investorsâ?? income payments have been delayed after the FSA suspended former custodian Pritchard Stockbrokers.

 

In a letter to investors, seen by Money Marketing, Fundwebâ??s sister publication, Christopher Day, director of Merchant Capital, says the firm will shortly commence the transfer of assets to its new custodian Reyker.

 

He says: â??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.â?

 

Merchant Capital, the structured products division of Merchant House Group, refuses to confirm how many investors are affected by the delays or when the payments will be made.

 

A spokesman says: â??Merchant Capital is still working closely with the FSA to ensure a smooth transfer of assets to its new custodian Reyker Securities, which is expected to commence shortly. Regretfully, this has led to a delay in payment of income but this delay will be kept to a minimum.â?

 

The letter also says: â??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.â?

 

The spokesman refused to comment on the amount of cash frozen or the number of clients that are affected.

[forlanssister 3,061]

Pritchards now in administration.

 

Craig Whyte's investment firm Pritchards collapses

 

The stockbroking firm where Rangers owner Craig Whyte was company secretary has been forced into administration.

 

Pritchards, based in Bournemouth, was banned from further trading five days before Rangers went into administration.

 

That came after the Financial Services Authority (FSA) found it had been using client funds to pay its own costs and trade on its own account.

 

Mr Whyte resigned as Pritchards' company secretary after that ruling.

 

He said he wanted to focus on his role at Ibrox.

 

As well as his personal involvement, Mr Whyte's firm, Liberty Capital, was a major shareholder in Pritchards.

 

The FSA has used new powers that require the administrator to prioritise the return of investors' funds.

 

http://www.bbc.co.uk/news/uk-scotland-scotland-business-17314070

 

The Financial Services Authority (FSA) has confirmed that Pritchard Stockbrokers gone into administration.

 

Pritchard entered the FSA's special administration regime (SAR) on 9 March 2012 and Timothy Ball, Roderick Weston and Alistair Wood at Mazars have been appointed joint special administrators.

 

On 29 February, another stockbroker, WH Ireland, announced that it had taken charge of assets, but not money, belonging to the majority of Pritchard Stockbrokersâ?? customers. This means that, in the near future, former customers of Pritchard Stockbrokers will be able to start dealing again through WH Ireland.

 

On 10 February, the FSA issued a supervisory notice stopping Pritchard carrying out its business due to client money failings, freezing Pritchardâ??s assets and the investor money and assets it held.

 

The FSA said it took this action because it had serious concerns about the way Pritchard had been running its business and handling investor money. It added it was concerned the firm had failed to adequately protect the money it held on behalf of investors, and that it had allowed this money to be used to meet its own costs.

 

Pritchard is the second firm to go into special administration after MF Global entered the regime in October last year.

 

The SAR was introduced by the regulator in February 2011 and differs from conventional administration in that it aims to return assets to clients as soon as possible, rather than focusing solely on recouping money for creditors.

 

The FSA said the SAR had three key objectives:

 

to ensure the return of client assets as soon as practicable;

to ensure timely engagement with market infrastructure bodies and the authorities;

and either to rescue the firm as a going concern or wind it up in the best interests of the creditors.

In the regular administration process only the third of these would apply, the FSA said.

 

IFA and financial services firm Merchant House Group was caught up in the fall-out from the restrictions placed on Pritchard, as its structured product subsidiary Merchant Capital had £8.8 million on account with Pritchard Stockbrokers at the end of June 2011.

 

Merchant House Group had said it could not determine whether its clients would lose out as a result of restrictions on Pritchard Stockbrokers.

 

http://www.citywire.co.uk/new-model-adviser/pritchard-stockbrokers-goes-into-administration/a573174?ref=new-model-adviser-latest-news-list

[forlanssister 3,061]

From today's FT

 

http://www.ft.com/cms/s/0/cd52b752-6a06-11e1-b54f-00144feabdc0.html#ixzz1oje3Xfbz

 

Merchant House, the financial services company, confirmed on Friday that £6m of client money had been frozen, after the stockbroker responsible for holding the assets went into administration.

Pritchard Stockbrokers acted as custodian for all client assets of Merchant Capital, the structured products division of Merchant House Group.

 

Merchant Capital said that the overwhelming majority of assets belonging to its 15,000 clients had already been moved and were safe. All non-cash assets, at a value of £310m, have been transferred to Merchant Houseâ??s new custodian, Reyker Securities. However, a further £6m remains frozen at Pritchard.

The company had previously claimed that client money was secure, as it was held in a separate account, and that delays in income payments would be minimal.

 

But in mid-February Merchant Capital updated its position in a statement to the London Stock Exchange, warning that it could no longer determine whether clients would suffer some economic loss. It has also confirmed that some investorsâ?? income payments due have been delayed.

 

Mazars, the administrators appointed to Pritchard, will be responsible for reviewing the financial position of the company, and will return as much cash as possible directly to each client, according to the Financial Services Authority.

 

The financial regulator issued a supervisory notice stopping Pritchard from trading in early February after it became concerned that the Bournemouth-based stockbroker was putting client money at risk, and had â??allowed this money to be used to meet its own costsâ?.

 

At the end of the month WH Ireland took charge of £400m of assets belonging to the majority of Pritchardâ??s customers. The stockbroker paid £5,000 for the non-cash assets under management of 8,000 clients.

Merchant Capitalâ??s parent company, Merchant House Group, has lost 50 per cent of its value in the past six months.

[forlanssister 3,061]

Another interesting development in the weird and (not so) wonderful world of Whyte's business 'empire'.

 

Merchant House shares suspended ahead of announcement

 

Merchant House Group has suspended its shares on the Alternative Investment Market of the London Stock Exchange, pending an announcement from the firm.

 

Cairns Financial Services, Merchantâ??s nominated adviser, said there were no more details to reveal at this time.

 

Earlier this month (9 March 2012), Merchant House structured products subsidiary Merchant Capital revealed it had pulled 98 per cent of client funds out of Pritchard Stockbrokers shortly before the brokerâ??s collapse.

 

Merchant Capital added that, at the time, two per cent of client monies - about £6m - remained frozen at Pritchard. This included money from matured policies which has not yet been claimed and money paid by clients to Pritchard which had not yet been invested, the company added.

 

The collapse of the broker followed a supervisory notice that was issued by the FSA which prohibited Pritchard from carrying on any of the regulated activities except to close transactions that had already commenced.

 

The notice concerned alleged breaches in relation to client asset handling at the firm, including use of client funds in its own accounts.

 

http://www.ftadviser.com/2012/03/29/ifa-industry/product-providers/merchant-house-shares-suspended-ahead-of-announcement-EtkeRAgOSSjE2tHYFDNsQO/article.html

[caseyjones 0]

The unluckiest millionaire in the world!

[der Berliner 3,307]

Which tells us?

[BlueMazza 0]

The unluckiest millionaire in the world!

 

millionaire? Ha, I'm starting to think I have more in my account than him and it's the day before pay day

[forlanssister 3,061]

Which tells us?

 

Let me guess it's all a figment of an anti Rangers press and now the Financial Times are in on it too?

[caseyjones 0]

millionaire? Ha, I'm starting to think I have more in my account than him and it's the day before pay day

 

I can see all of his UK companies going to the wall - as part of his planned exit strategy. I certainly don't doubt that he has made millions along the way. That is what will pay for his retirement to the BVI.

[forlanssister 3,061]

Think this one's in BH's territory!

 

Client anger over new Merchant Cap fees as group suspends shares

 

New Merchant Capital custodian Reyker Securities has angered clients by telling them they need to pay a fee in order to receive their delayed income payments and have it act as custodian.

 

Merchant Capital appointed Reyker earlier this month to handle client monies in its structured products division to replace former custodian Pritchard Stockbrokers after it was suspended by the FSA.

 

Assets and cash worth approximately £350m have been transferred from Pritchard to Reyker.

 

Money Marketing revealed at the same time that an undisclosed number of investors were yet to receive income payments owed to them.

 

Reyker has now written to clients saying that in order to receive income payments and have it act as custodian they will need to pay an admin fee of £15 per investment before April 13.

 

If the letter of agreement is received between April 13 and April 23 the charge will increase to £20 per plan, going up to £25 per investment for clients who respond after April 23.

 

The letter from Reyker, sent out as part of an information pack and seen by Money Marketing, says: â??Whilst Reyker is striving to be part of the solution to the problems caused by the suspension and subsequent administration of Pritchard, we are a commercial financial institution and this means that we need to charge fees for the services we provide to cover the costs that we incur with third parties, such as exchanges, regulators and banks.â?

 

Reyker says the admin cost covers the cost of writing to clients, any followâ??ups, inputting data, the cost of taking assets into custody and providing a portfolio valuation.

 

Parent firm Merchant House Group temporarily suspended its shares on the Alternative Investment Market this morning pending an announcement from the company.

 

Adler Financial Planning director Stuart Burkin received a call from a client yesterday after she received the letter from Reyker Securities.

 

He says: â??I imagined when I heard about this there must have been some mistake. Surely Reyker were not expecting the client to pick up the fee? But clearly they are. It is crazy.â?

 

Lowes Financial Management managing director Ian Lowes says: â??This is an unfortunate situation brought about through no real fault of Merchant. Obviously a new custodian needed to be appointed and Merchant acted quickly to do so.

 

â??We appreciate that Reyker need to be paid but we are surprised that investors are being asked to foot the bill. Whilst we have been assured by Merchant that this was following extensive consultation with the FSA this does not make it any the more palatable.â?

 

Merchant House Group was unavailable for comment.

 

http://www.moneymarketing.co.uk/investments/client-anger-over-new-merchant-cap-fees-as-group-suspends-shares/1048963.article?__utma=159696636.2087560473.1333035597.1333035597.1333035597.1&__utmb=159696636.3.10.1333035597&__utmc=159696636&__utmx=-&__utmz=159696636.1333035597.1.1.utmcsr=discussthemarket.com|utmccn=(referral)|utmcmd=referral|utmcct=/mhg-chat/&__utmv=-&__utmk=244636101