Civil litigation against financial adviser Wealthtek and John Dance was ‘stayed’ by the High Court in order for the regulator to prioritise criminal investigation.
The regulator took action against WealthTek last April in order to “protect consumers following the identification of serious regulatory and operational issues”.
The Financial Conduct Authority (FCA) order the firm to cease operations on 4 April 2023 while it examined suspected regulatory breaches concerning client money and custody assets.
The regulator is currently conducting a regulatory and criminal investigation into WealthTek and Dance, which includes potential regulatory breaches relating to client money and custody assets, and criminal offences of fraud and money laundering.
The FCA obtained a worldwide order to freeze assets belonging to Dance up to the value of £40m.
While working in partnership with the FCA, Northumbria Police arrested him on 4 April in connection with the investigation, he was interviewed under caution, in which he exercised his right to silence.
On the same day last April, the FCA brought civil proceedings against the company and Dance under Part XXV of the 2000 Act.
On 26 January, the High Court heard an application by the FCA to stay the proceedings for a period of 12 months. It was opposed by Dance.
The reason was the FCA anticipates that is will be in a position to determine whether or not to bring criminal charges within 12 months.
On Friday, His Honour Judge Baumgartner sided with the FCA, ruling that “the criminal investigation being pursued by the FCA should take priority over the High Court proceedings with a view to the FCA making a charging decision within the 12 month stay.”
He added that he “does do not consider a 12 month stay would cause Dance a real risk of serious prejudice which may lead to injustice.”