The stockbroker part-owned by under-pressure Rangers' boss Craig Whyte was put into special administration yesterday, a month after its assets were frozen by the Financial Services Authority.
Mr Whyte, pictured, is company secretary of Bournemouth-based Pritchards Stockbrokers, which was suspended by the FSA on 10 February. The regulator said the firm had used clients' funds to pay its own expenses and to trade on its own account, putting funds at risk.
The FSA said Pritchard "failed to comply with the proper standards and failed to act with integrity".
The accountancy firm Mazars have been appointed special administrators and said they would write to the estimated 5,000 people affected by the broker's collapse. Tim Ball, Steve Wood and Rod Weston of Mazars will lead the special administration. They estimate that it will take eight weeks to publish a creditor report and 10 weeks to convene meetings of creditors and clients.
The total cash held by the firm on behalf of clients was £17.1m, according to the latest published Pritchard accounts, but it is not clear yet how much may be missing. If there is a shortfall, the Financial Service Compensation Scheme will step in for the first £50,000 of each client.
Shares held through the firm have already been transferred to rival stockbroker WH Ireland, and clients should be able to start dealing again soon.
Meanwhile some £310m held by Pritchard on behalf of Merchant Capital's structured products division have been transferred to Reyker Securities.
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