Investment group Hartmann Capital is set to wind up after the Financial Conduct Authority (FCA) prohibited it from carrying out regulated business after discovering a client money shortfall of £1.5m.
The FCA has prohibited the firm from regulated activities and imposed immediate sanctions which include a stop on releasing client money and termination of derivative contracts.
The watchdog said it was concerned that the firm would increase its existing shortfall in its client money accounts if it continued trading.
The regulator detected shortfalls of £1.5m in client monies and a separate £1.2m in regulatory capital at the firm.
It said the firm had no "reasonable short term prospect of being able to make good that shortfall" and the directors' proposal to cover debt payments with client money raised further concerns.
The FCA treated the situation as an "exceptionally urgent case" and used its own-initiative power to impose immediate requirements on the firm.
In a first supervisory notice dated 24 December the FCA wrote: "The risk of further loss to consumers because of Hartmann's failings (including its failure to make good the client money shortfall and its proposal to use client money to fund further expenses of the firm) causes the Authority to have serious concerns about Hartmann, such that the exercise of the Authority's own-initiative power to impose [the] requirements with immediate effect is an appropriate response to those concerns."
Hartmann said on its website that the directors have applied to the court "for a petition for the winding up of the company".
The Aviva Investors Multi-asset Funds (MAF) target equity risk rather than absolute volatility. Thomas Wells, Multi-asset Fund Manager, explains that while absolute volatility varies significantly over time, the inherent risk of investing in equities remains relatively constant.
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