London-based wealth firm Hartmann Capital has applied to wind up after the FCA prohibited it from carrying out regulated business due to a £1.5 million client money shortfall.
The regulator has issued Hartmann Capital a notice that prohibits it from dealing with or releasing client money.
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The notice also requires the firm to cease carrying out any regulated business, except from settling certain transactions in non-derivative financial instruments and closing derivative contracts to which it is a party.
In December 2013 the firm informed the regulator that although it should hold around £25 million of client money it had a £1.5 million shortfall and also had a £1.2 million shortfall for its regulatory capital.
Additionally, the firm proposed to use client money to fund payments if it was unable to pay its debts.
The regulator said that there is no reasonable prospect of the firm being able to make good the client money shortfall and in addition there is a real risk that Hartmann may, whether or not in good faith, permit client money to be released from its client bank accounts or client transaction accounts- so resulting in a greater client money shortfall.
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By GlobalDataFCA’s supervisory notice was published on the same day when Hartmann applied for a petition for the winding up of the company on 24 December.
