The High Court has decided to ‘stay’ civil litigation against financial adviser WealthTek and its owner John Dance, allowing the Financial Conduct Authority (FCA) to prioritise its criminal investigation into the matter.
The FCA initially took action against WealthTek last April to “protect consumers after uncovering serious regulatory and operational issues.”
On 4 April 2023, the FCA ordered WealthTek to cease operations while it investigated suspected breaches involving client money and custody assets.
The regulator is currently conducting both a regulatory and criminal investigation into WealthTek and Dance, focusing on potential breaches related to client money and custody assets, along with possible criminal offences, including fraud and money laundering.
The FCA also secured a global freezing order on Dance’s assets, up to a value of £40 million.
In collaboration with the FCA, Northumbria Police arrested Dance on 4 April in connection with the investigation. During the interview, conducted under caution, Dance exercised his right to remain silent.
On the same day in April, the FCA initiated civil proceedings against WealthTek and Dance under Part XXV of the Financial Services and Markets Act 2000.
On 26 January, the High Court reviewed an application by the FCA to pause the civil proceedings for 12 months, a move that was contested by Dance.
The FCA argued that it would likely decide within the next 12 months whether to pursue criminal charges.
On Friday, His Honour Judge Baumgartner ruled in favour of the FCA, stating that “the criminal investigation being conducted by the FCA should take precedence over the High Court proceedings, with the expectation that the FCA will make a charging decision within the 12-month stay.”
The judge also noted that he did not believe a 12-month stay would pose a real risk of serious prejudice to Dance that might lead to injustice.