November 16, 2023

FCA obtains restraint order against WealthTek

On November 15, 2023, the Financial Conduct Authority announced that it had replaced the worldwide freezing order against WealthTek Limited Liability Partnership and its principal partner John Dance with a restraint order obtained under the Proceeds of Crime Act 2002.  WealthTek, which also trades as Vertem Asset Management and Malloch Melville, is a wealth management firm that is authorized and regulated by the FCA and provides discretionary, advisory and execution only services to retail clients and intermediaries.  According to the FCA, the purpose of the restraint order is to preserve assets to ensure that they will be available for confiscation if the FCA is able secure a criminal conviction.  Dance’s restraint order, which covers assets valued up to £40 million, allows him to claim reasonable living and business expenses just as the worldwide freezing order that was previously in place had provided.

In early 2023, the FCA announced that it had launched an investigation into WealthTek and Dance and potential regulatory breaches related to their handling of “client money and custody assets, and criminal offenses of fraud and money laundering.”  According to the FCA, the investigations were commenced because the FCA register reflected that the firm did not have permission to hold client money or custody assets.  On April 4, 2023, Dance was arrested and WealthTek was forced to cease operations while the FCA examined the suspected regulatory breaches.  WealthTek was subsequently put into special administration by the High Court on April 6, 2023.  Since then, the FCA and the Joint Special Administrators have become aware of a possible £81.4 million shortfall in client assets and money associated with WealthTek.

FCA Statement | FCA News Release