The UK Insolvency Service took stern action against a former spread betting firm executive last week, barring him from holding any directorship for the next nine years. The Herald Scotland reports on the case of Steven Alexander, who ran Echelon Fund Management until October 2008, when the Glasgow-based spread betting firm collapsed with debts of £30 million.
Alexander was accused of misappropriating £2.6 million in the debacle, and could still be facing criminal action.
The Herald reports that Echelon specialised in offering investors spread bets on the direction of markets such as shares and commodities. Like many operators, it ran into trouble during the economic recession and was coming under pressure to pay back debts of £4.4 million to its largest creditor, the Geneva-based wealth management adviser Stokors, which threatened to throw the company into liquidation.
Alexander persuaded a party from the United Arab Emirates to transfer €3 million for investment purposes, but transferred the money to Stokors on October 13 to buy time. It appears to have made little difference, because the Swiss firm raised a winding up order just two weeks later.
The nine year ban on future directorships is one of the most severe orders the Insolvency Service can impose.
Further actions may follow a Financial Services Compensation Scheme ruling that investors prejudiced by the collapse may each apply for compensation of up to £48,000, with as many as 900 investors queuing up with potential claims.
Eileen Blackburn, joint liquidator at French Duncan, said that the liquidation was still being processed, but that any outstanding dividend for creditors was “not going to be substantial”.
Source: InfoPowa News