A London-based brokerage has been closed by a court order after the firm attracted regulatory scrutiny over potential financial crime risks.
(Bloomberg) — A London-based brokerage has been closed by a court order after the firm attracted regulatory scrutiny over potential financial crime risks.
IBP Markets Limited, a wholesale broker that provided more than 40 clients with execution and custody services, was placed into a so-called special administration process by a London judge on Friday. The firm holds around £36 million ($44 million) of client money and £653 million of client custody assets, according to a filing prepared for the hearing.
The administration order follows action by the UK’s Financial Conduct Authority that placed limits on the amount of business that the firm could conduct earlier this year.
“The restrictions were based on concerns that the company was unable to reconcile client assets and client money, and that the information on the basis of which it had been doing so was compromised,” Adam Al-Attar, a lawyer representing directors at IBP, said in court documents. “The FCA has also expressed the concern that the company may have been used in connection with financial crime.”
Special administration is a form of insolvency process that was introduced in the wake of the financial crisis, designed to ensure there is minimal disruption to financial markets as a result of a firm’s collapse.
David Soden and James Bennett of Teneo Inc. were appointed as joint special administrators of the company by order of the judge.
IBP Markets representatives didn’t immediately respond to requests for comment.
–With assistance from Donal Griffin and Jonathan Browning.
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