Stephen Hunt, founder of retirement specialist Rockingham Independent, owes the company almost £100,000, according to a report by liquidator Probitas.
Rockingham was fined £35,000 by the FSA in September 2011 for exposing 426 elderly clients to unsuitable investment advice, 39 of whom were advised to invest in unregulated collective investment schemes (UCIS). However, the fine has not been paid.
More than 200 clients with cautious or moderately cautious attitudes to risk were recommended to invest in ARM Bonds.
The regulator also banned Hunt, along with Rockingham co-founder Gary Forster and adviser Jonathan Edwards, from advising on UCIS investments.
On 16 March, Probitas Ltd announced it had been instructed by Rockingham to start putting the business into liquidation.
A statement of affairs dated 30 March suggests Hunt owes the company a total of £99,851 in un-repaid loans. Probitas said it is unclear how much of this sum will be recovered.
But Hunt said he received the money as a salary via directors' loan over a two-year period.
According to the Probitas report, a number of awards made against Rockingham by the Financial Ombudsman Service (FOS) - totalling some £52,600 - have also been written off.
The firm also owes around £51,000 to HM Revenue and Customs (HMRC), as well as smaller amounts to Aviva, SAGE Cover and SimplyBiz.
Some 25 Rockingham clients challenged Hunt at an investors' meeting in Peterborough on 30 March.
Gordon Pullen, an ARM investor who acted as a proxy for a number of Rockingham clients, told IFAonline many clients were unhappy about how the situation had been handled.
ARM claimed last week it will agree on a timescale for the sale of its assets and liabilities at its next meeting, but refused to set a date.
"The update we got [from ARM] a few weeks ago was pathetic," he said, before adding "an awful lot was going on behind the scenes".
A number of IFA firms in the UK and Malta, where the ARM bond was also sold, are believed to have met with ARM in the last week regarding the recovery of assets.
The Financial Services Compensation Scheme is also understood to have taken responsibility for preserving Rockingham's records while the process of appointing a liquidator for the business was being conducted.
Last week, IFAonline reported some ARM bondholders had moved to smaller accommodation or rented out their homes as income from the investment stalled.
"Investors haven't had any income for nine months and some of them have run out of cash," Pullen said. "There are quite a lot of difficult stories. It's tough."
Rockingham was founded in 2004 by Hunt and Forster, and grew to become Britain's largest annuity broker by 2010, with 18,000 customers and 70 staff.
"The purpose of the company was always to try and help people in retirement," the directors said in liquidator Probitas's report.
"The company's biggest mistake was allowing customers the freedom to limitless investment into ARM and to underestimate the risk of the ARM Assured Income Plan.
"For this oversight, the directors sincerely apologise. The reason for the company's failure is entirely down to the collapse of the ARM bond."
Both the FSA and Probitas were unavailable for comment.
This article is an amended version. The original incorrectly stated that the FSA had banned Rockingham Independent's co-founders Mr Stephen Hunt and Mr Gary Forster from advising on investments. We are happy to make clear that the FSA only prevented Mr Hunt and Mr Forster from advising on UCIS and SCARP schemes.
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