Financial services directors disqualified for trading while insolventJune 9th 2021
Two financial services directors have been disqualified for continuing to trade and take money from clients while their company was insolvent.
Sam Lyon Head of Corporate & Commercial reports.
Paul Rossi was a director of Independent Derivative Traders Ltd. The company traded as ‘Futex’ and provided access to a financial markets trading platform for sub-contracted independent traders.
He was joined in the management of the company by his brother Mark and Daniel Michael Goldberg.
Independent Derivative Traders was incorporated in March 1995 but 21 years later in February 2016, it became insolvent due to difficult trading conditions and increased running costs, which meant it could not meet all its liabilities.
The directors received professional advice that all the company’s creditors should be treated equally and they had an obligation to look after its creditors’ interests and not to worsen their position.
However, despite becoming insolvent, the company obtained deposits from two new traders totalling £75,000, which were then used in general trading, while also paying-out over £79,000 to Paul and another director, as well as to an associated company. This was contrary to the advice given and detrimental to their creditors.
The company went into liquidation in November 2016 and the Secretary of State has since accepted disqualifications undertakings from Mark Rossi (eight years), Paul Rossi (six years) and Daniel Goldberg (three and a half years) for their various roles in causing or allowing the company to take money from clients and make self-serving payments while being insolvent.
David Brooks, Chief Investigator of at the Insolvency Service, said: “When the company became insolvent, the directors were specifically instructed not to do anything that was detrimental to creditors. However, they decided to completely disregard that advice, putting their creditors at risk.
“These disqualifications should serve to further underline that such behaviour is unacceptable and we will seek disqualifications against those directors that do not uphold their duties.”
If you would more information about the issues raised in this article or any aspect of insolvency and company law please contact Sam on 01228 516634 or click here to send him an email.