First WealthTek customers receive money and assets in the wake of fraud scandal

Some of the hundreds of investors who fell victim to the WealthTek scandal have now received their assets and money back, it has been revealed.

Administrators handling the affairs of the Tyneside wealth management firm, which was ordered to close last year amid allegations of fraud, say they have made the first distribution of money and assets owed to out-of-pocket clients. Around 350 clients of WealthTek, which also traded as Vertem Asset Management, have been included in this initial tranche, leaving a further 112 clients who have been told to expect transfers over the next month.

Another 120 clients have not yet come forward, with the insolvency experts at BDO urging those people to take the necessary steps. They also highlighted abuse they have sometimes received while trying to help those left locked out of their money and assets since WealthTek's demise more than 18 months ago.

The process of determining where money and assets are owed has been made long and difficult by what administrators say are inaccuracies in the firm's records. Earlier this month, £26.69m was made available from the Financial Services Compensation Scheme (FSCS) to support WealthTek clients, in some cases prior to the return of their assets and money.

BDO said: "The joint special administrators and their team are very aware of the hardship that clients and their families have suffered as a result of WealthTek’s failure. For those eligible clients who are not yet in a position to receive the return of their client assets, we hope that providing access to their FSCS shortfall compensation will help to alleviate any further hardship prior to the transfer/distribution of their portfolios."

The closure of WealthTek was forced by the Financial Conduct Authority (FCA) in April last when it said "serious regulatory and operational issues" had come to light, Subsequent investigation by the administrators found WealthTek had been trading for a "prolonged" period of time with a shortfall - a missing £81.4m.

Meanwhile a probe by the FCA led officials to say that WealthTek founder John Dance's alleged misconduct could represent "one of the largest frauds perpetrated by an FCA regulated individual at an authorised firm". Court documents revealed the FCA accused Mr Dance of diverting about £49m from client funds into his own personal account and other companies he is linked with.

A worldwide freezing order was placed on around £40m of assets belonging to Mr Dance and a later Restraint Order was granted over the assets, preserving them for possible future confiscation should there be a criminal conviction. The FCA is now focussed on a criminal investigation.

Meanwhile retirement savers and other investors have been left in limbo, unable to retrieve their assets and money.