In a recently-added notice on the home page of its website, which has now been given over to a list of all of the company’s recent statements with respect to its current situation, Hartmann notes that the administration order granted on 3 January means that certain limits are now in place that will restrict the company's ability to carry out transactions without the administrators’ prior permission.
The latest Hartmann statement adds that its clients' monies are being "held in safe ring-fenced accounts, although the present evidence suggests a shortfall as regards" them.
The statement does not provide details as to how the accounts have been ring-fenced, or on what date or in what manner the ring-fencing is being deemed to have taken place.
As reported, Hartmann Capital, a London-based investment firm and discretionary accounts manager, the products of which have been sold abroad as well as in the UK, is being wound up in the wake of a Financial Conduct Authority “supervisory notice” against it.
The FCA issued its notice against Hartmann on its website on Christmas Eve, citing “shortfalls” in the company’s client money accounts.
The FCA notice states that the company must cease conducting any business “that involves the carrying on of any regulated activities” – including initiating any new business – involving client money, except to allow for the settlement of certain transactions that were being settled at the time of the announcement.
Although Hartmann is a UK company, its range of discretionary accounts was sold outside the UK by financial advisers, who accesssed them exclusively through ATSG Wealth Management, also London-based. It is not known how many clients it has, or what percentage of them are located outside the UK.
'6% shortfall'
According to the FCA’s notice, the shortfalls were brought to the authority’s attention on 16 December by Hartmann, which on 19 December told the authority it had a £1.5m shortfall out of its holding of £25m in client money, or around 6%, and that it also held “in the region of £36m” in custody assets.
The company told the FCA that it had sent instructions to a bank with which it was holding client money to withdraw approximately £100,000, in spite of the shortfall, “in order to pay its operating expenses”, but, according to the FCA's notice, the authority said it had ordered that instruction to be reversed, arguing that it would have caused the existing client money shortfall to have been worsened.
Hartmann Capital, which until the end of 2011 was known as Lewis Charles Securities, is headed up by Andrew Fitton, its chief executive and acting chairman since January 2011. Fitton is said to be Hartmann's largest single shareholder, and is also a founding partner of Gracchi Capital Partners, a hedge fund company specialising in derivative and "volatile" strategies, according to Hartmann Capital's website.
