UK broker Beaufort Securities has had almost £800mln in client assets frozen by its administrators after entering insolvency.
The Financial Conduct Authority (FCA) placed Beaufort into insolvency on Friday after assessing its financial situation.
READ: FCA shuts down troubled brokerage Beaufort Securities
Administrators PwC said on Tuesday it does not expect to return any of the frozen assets before mid-April and has ringfenced a further £50mln in segregated client money accounts.
PwC has also cut the number of staff to 40 from 120, through redundancies and closed two offices.
The FCA said its decision to place the broker into insolvency was “to protect assets from dissipation and protect the customers of both firms”.
The move came amid concerns over the company’s financial state and a US criminal investigation into a more than US$50mln stock fraud and laundering scheme.
The regulator has ordered Beaufort Securities to cease all regulatory activity and not to dispose of any firm or client assets without its consent.
The broker was already banned from holding or receiving client monies after a string of complaints to the Financial Ombudsman Service over the past two years.
As many as 15 companies were left scrambling to find a new broker after Beaufort’s demise.
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Among those affected was Kibo Mining PLC (LON:KIBO), which was in the middle of a 750,000 fund raise being carried out through Beaufort.