Pritchard Stockbrokers has today entered the Special Administration Regime (SAR) according to the Financial Services Authority after it was revealed that the firm had used client's money to pay its own expenses.
Timothy Ball, Roderick Weston and Alistair Wood at Mazars LLP have been appointed joint special administrators.
So what is the Special Administration Regime?
Following the collapse of Lehmans Brothers it was felt that the current legislation under the Insolvency Act 1986 was not sufficiently robust to deal with the complications of investment firms and their financial products. The issues of multiple cross liabilities, trusts, determining assets, valuation and the stability of the financial system raised additional challenges. Consequently, the Special Administration Regime or SAR was set up in 2009. It comes under the Banking and Finance Act but takes as much as possible from the Insolvency Act.
The Financial Services Authority has the power to appoint a special administrator if it feels that client's money is at risk.
Last month, WH Ireland announced it had taken on Pritchard's assets and its client book, which included some 8,000 accounts. following the FSA's intervention to prevent it carrying out any regulated activities
Mr Whyte of Glasgow Rangers fame is company secretary of Pritchard...