WealthTek LLP, the firm owned by notable figure John Dance, which was abruptly shut down in April due to the discovery of “serious regulatory and operational issues,” was found to have been operating with a “significant” deficit in client assets for an “extended period,” according to the company’s administrators.
The special administrator, appointed by the high court, has released a six-month update on its ongoing investigation into WealthTek. The firm, which also traded under the names Vertem Asset Management and Malloch Melville, had several discrepancies in the accuracy of its financial records, as noted in the report.
WealthTek, a fund management firm, ceased its operations on 4 April after the Financial Conduct Authority (FCA) suspended its activities. Subsequently, special administrators were brought in, and a £40 million worldwide freezing order was placed on Dance’s assets.
An initial discovery revealed a £81.4 million deficit in client funds, which was later revised to £80.4 million in a report released on Friday. This report covers the period from 6 April to 5 October 2023.
As part of the investigation, the joint special administrators (JSAs) reviewed approximately 52,000 transactions across 75 bank accounts held by WealthTek over a 12-year period. This analysis helped the administrators better understand the origins of the financial shortfalls.
However, the report noted that “Due to reasons of confidentiality and to avoid compromising any potential actions the JSAs may take against third parties, further details regarding the funds flow analysis cannot be disclosed at this time.”
The report further highlighted a “significant” discrepancy between the assets reported by WealthTek on its investment platform and the actual assets it managed, a discrepancy that persisted over an extended period.
“The JSAs’ investigations reveal that WealthTek has been operating with a significant shortfall in client assets for a prolonged period,” the report stated. “This has led to numerous issues with the accuracy of the company’s books and records.”
“During the administration period, the JSAs have sought advice from leading counsel on various issues arising from their investigations into the company’s financial records, to determine the impact on clients.”
Before these events, John Dance was a prominent figure in the horse racing industry, owning celebrated horses such as Laurens and Bravemansgame, and sponsoring prestigious races like the Group 1 Futurity Trophy at Doncaster and the Eider Chase at Newcastle.
In September, the British Horseracing Authority (BHA) imposed an “interim suspension” on horses owned by Dance and his wife, Jess, who operated under the banner of Coverdale Stud. This suspension, intended to prevent their horses from racing, also extended to horses owned by the Titanium Racing Club, which Dance financially supported and previously presided over. The suspension is believed to be linked to the alleged non-payment of funds following the sale of a Titanium-owned horse, Sacred Angel.
James Horton, who was previously a private trainer for the Dance family and was set to move into their newly refurbished Manor House Farm in Middleham, resigned from his position in September, announcing his plans to establish his own training operation in Newmarket.
John Dance has not made any public statements since WealthTek ceased its operations. In its latest update in September, the FCA confirmed that Dance remains under investigation for potential regulatory breaches related to client funds and custody assets, along with possible criminal offences, including fraud and money laundering.