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Home » FCA Refocuses WealthTek Investigation On Suspected Criminal Offences

FCA Refocuses WealthTek Investigation On Suspected Criminal Offences

Investigators at the Financial Conduct Authority have paused civil action against wealth management firm WealthTek and its founder John Dance in order to focus on suspected criminal offences.

The Tyneside business was closed down by the watchdog last April for regulatory breaches and amid concerns about fraud and money laundering. The watchdog says it has made progress in a criminal investigation into WealthTek, which also traded as Verterm Asset Management and Malloch Melville, and Mr Dance.

A High Court judge has granted the FCA a year-long pause in its civil case against Mr Dance and the business. It says the option to restart that case is left open.

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A Restaint Order made in November last year, which followed a prior freezing of £40m of assets belong to Mr Dance, is still in place. The FCA says that is intended to preserve assets so they can be made available for a future confiscation order, which can only be made following a criminal conviction.

WealthTek was put into special administration following its closure. Insolvency experts subsequently uncovered evidence of the firm, which was not authorised to hold client money or custody assets, running with a significant shortfall for a prolonged period of time. That shortfall was thought to be around £80m in client money and assets.

Having spent considerable time sifting through 12 years worth of WealthTek’s transactions, joint administrators at BDO revealed issues with the accuracy of WealthTek’s books and records. In September, out-of-pocket WealthTek customers were told by the Financial Serviced Compensation Scheme that they could receive payouts over the missing money and assets, up to the value of £85,000.

In an update on the civil case, the FCA said: “On 1 March 2024, following an application by the FCA, His Honour Judge Baumgartner sitting as a judge of the High Court granted a 12-month pause in our civil case against Mr Dance and WealthTek LLP. The investigation into suspected criminal offences in respect of WealthTek LLP and Mr Dance continues. Progress in that investigation has led us to focus our resources on the suspected criminal offences. The option to restart our civil case remains open to the FCA.”

Mr Dance was a prominent racehorse owner, with several animals under his ownership initially banned following the WealthTek closure and before the British Horseracing Authority struck a deal with the FCA that allowed Mr Dance’s 50% stake in Bravemansgame to be sold so the horse could compete. In Newcastle, Mr Dance was also the co-director of nightclub The Lofts, which collapsed in May with creditor claims of more than £7m.

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