Sin Bin: FCA bans pair over £50m fraud

Richard Clay and Kathryn Clark, both former Partners at Arck LLP, have been banned from working in any regulated financial services role by the City watchdog after a criminal investigation into the offences committed by the pair.

Hundreds of investors lost millions of pounds after the Clay and Clark conspired to embezzle money acquired via Sipps investment having promised annual returns of 40 per cent.

Damning email evidence was later leaked to reveal how the then regulator, the Financial Services Authority (FSA), the City of London Police and HMRC had all failed to act to protect the investors during the affair.

Some investors later received payouts from Yorkshire Bank, which provided banking services to Arck, after it emerged that it had failed in its duty to keep investors’ money safe in segregated accounts.

The Serious Fraud Office and Nottinghamshire Police charged Clay and Clark with dishonesty offences in November 2013.

On 4 July 2014, Ms Clark pleaded guilty to two counts of forgery and on 3 October 2014, she pleaded guilty to three counts of fraud.

On 19 December 2014, Mr Clay pleaded guilty to three counts of fraud.

Mr Clay was sentenced to 10 years and 10 months’ imprisonment and Ms Clark was sentenced to two years’ imprisonment for their offences. Ms Clark’s prison sentence was suspended for two years.

The FCA has now concluded that both Clay and Clark, who spent their client’s savings on private helicopters, luxury cars and high-end properties, are not fit and proper to carry on any function in relation to any regulated activities.

In addition to banning Clark, the FCA has also withdrawn her FCA approval in relation to HDA. Clay was not an FCA approved person at HDA, nor has he been an FCAapproved person since 2005.

Earlier this year, Clay was ordered to pay over £344,000 as part of a confiscation order relating to the fraud. Clark was ordered to pay £178,522.