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Release Date: 9th October 2014

To access the original FCA document, click here.


The Financial Conduct Authority (FCA) has imposed fines and industry bans on David Gillespie and David Welsby, the former Managing Director and Finance Director of Pritchard Stockbrokers Limited, respectively. They were penalised for their failure to adequately protect client money, a fundamental regulatory requirement. Due to severe financial hardship demonstrated by the individuals, the fines were substantially reduced to £10,500 for Gillespie and £14,000 for Welsby from potential penalties of £144,000 and £72,000.

Pritchard Stockbrokers itself was censured and would have faced a fine of £4,932,600, had it not entered Special Administration on 9 March 2012. This administration was necessitated by the firm’s insolvency, precipitated by the reckless financial practices of its directors. The mismanagement included the misuse of client funds to cover business expenses and insufficient funding of client accounts, leading to a significant shortfall of approximately £3 million.

The directors’ misconduct was particularly marked by their reliance on an undocumented offshore facility to manage client funds, which was inappropriately counted as a client money resource. This malpractice not only breached the FCA’s client money rules (CASS) but also resulted in considerable consumer detriment.

Key Takeaways for Other Firms:

These practices are critical for maintaining trust, ensuring compliance, and safeguarding the interests of clients within the financial services industry.

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