A company has been placed into special administration after owing more than £8 million to creditors.
George Alex Popescu, director of the FCA-approved Boston Prime Ltd, a prime brokerage firm, has also been disqualified from acting as a director for 12 years.
Special administration is reserved for investment firms which fall into financial trouble. The primary responsibility of a special administrator is to return investors’ assets as soon as reasonably practicable.
The High Court found that Mr Popescu had breached his fiduciary duties to act in the best interest of the firm and failed to ensure that both the firm and himself – as an approved person – complied with the FCA’s rules and guidance.
The director had proposed a conditional sale of the company to a multinational group of companies in July 2014.
The Insolvency Service found that Mr Popescu had relinquished control of Boston Prime’s affairs, including control of its bank accounts, book, and records, to the buyer following the proposed sale – contrary to the FCA’s rules surrounding the sale or change of control of a company.
The Service also found that he caused or allowed adjustments to be made of over $3 million to client’s trading accounts which were subsequently disputed by clients. Mr Popescu was unable to provide details of the transaction’s legitimacy.
Commenting on the disqualification, Robert Clarke, Investigations Group Leader at The Insolvency Service, said: “Directors have a duty to ensure that they exercise sufficient control over company operations to ensure that the company complies with relevant regulations and that its transactions can be accounted for.
“This disqualification should serve as a warning to other directors who fail to fulfil their duties.”