Liverpool broker, Blankstone Sington (BSL), which had more than £400m of funds under management, has been declared ‘failed’ by the FSCS (Financial Services Compensation Scheme).
The company, which allegedly negotiated the sale of Everton FC shares, was placed under special management on October 16 last year, following a court order under the Investment Banking Administration Regulations 2011.
The Special Administrators – Andrew Poxon, Alex Cadwallader and Hilary Pascoe of Leonard Curtis – said they had secured all clients’ assets and safeguarded the company’s systems. Clients were assured that their assets are safe.
BSL is an FCA-authorised wealth control firm and a member of the London Stock Exchange, and founded at the Exchange Flags labour complex in Liverpool.
On November 16, 2021, the FCA (Financial Conduct Authority) took temporary action to prevent BSL from disposing or diminishing the value of its own assets, accepting new client money or new custody assets from existing clients and from opening new client accounts, without the FCA’s written consent.
BSL also required posting a notice on its website informing consumers of the restrictions.
Special management is a modified insolvency procedure for certain investment firms.
On November 1, 2022, Blankstone Sington disclosed that it had recorded an annual loss due to the ongoing impact of FCA shares, it said.
The initial restrictions were due to the “loss of several experienced workers who will be replaced seamlessly,” the company explained.
The company announced that it had fallen to a pre-tax loss of £531,731 for the 12 months to May 31, 2022, compared with a profit of £63,618 in the previous year. Its turnover remained static at £3.2m over the same period, but its funds under management fell from £472.4m to £401.8m.
Now, the FSCS has an update, after calling BSL a “failure. “
In a statement, he said: “On December 21, 2023, we explained that we expect to pay the refund to eligible Blankstone Sington customers.
“We have now taken the next step by marking the company in default. This is all we want to do because it confirms that the FSCS believes the company owes money to its consumers and cannot bear the costs of a conceivable claim itself. .
“We are still closed to complaints, so consumers at Blankstone Sington have nothing to do at this time. There is still a lot to be done before consumers can get their goods and their goods back.
He added: “We continue to work intensively with the Joint Special Administrators and will provide additional updates, adding timelines, when this data becomes available. “
In the past it has warned that before invoice payments can be made under the special management process, the Client and Creditor Committee and the court will have to approve the special administrators’ joint distribution plan, which sets out how the clients’ assets will be returned. to them.
It will be explained separately how cash will be returned from visitors to consumers. Most likely, the client’s assets and cash will be transferred to a new broker at the same time.