By Joshua Dare-
An IFA who was sued by former Premier League legend and former client Alan Shearer has been banned for taking assets from his insolvent company.
Kevin Gerard Neal and his wife Cheryl have been banned from acting as company directors for six and four years respectively, due to misconduct while running Kevin Neal Associates Wealth Management LLP (KNAWM).
In June 2017, Neal agreed an out of court settlement with former Newcastle and England striker Shearer, who had sued for £9 million over claims the adviser was ‘dishonest’ and ‘careless’ in the advice offered to the Premier League’s all-time leading scorer. This claim related to a previous company, Kevin Neal Associates Ltd.
The finance company had been incorporated to take over the wealth management business of a previous company, Kevin Neal Associates Limited, which went into compulsory liquidation on 1 July 2013.
The firm became liable by a deed poll and declaration, signed by both Kevin and Cheryl Neal on 8 April 2011, KNAWM for any award of the Financial Ombudsman Service against Kevin Neal Associates Limited.
By May 2014, at least six decisions by the Financial Ombudsman Service, totalling at least £573,274, had gone against Kevin Neal Associates Limited and KNAWM.
The company’s previous insurer refused to settle the claims and the Financial Conduct Authority (FCA) had altered KNAWM’s permissions to ensure that it did not transfer away assets without its permission.
Despite this, between May and June 2014, KNAWM transferred £55,000 and two cars worth £22,120 to associated parties when they knew or should have known that KNAWM was about to become insolvent.
However, these transactions were to the unreasonable risk and ultimate detriment of other creditors who either submitted claims in the liquidation of Kevin Neal Associates Limited or were included within the Statement of Affairs.
The Secretary of State accepted disqualification undertakings from Kevin Gerald Neal and Cheryl Neal on 10 May 2018 for periods of 6 and 4 years respectively, and they are effective from 31 May 2018.
The disqualifications prevent Mr and Mrs Neal from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company or limited liability partnership for the duration of their bans.
The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK.
The agency also authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.
The IFA was previously sued by former client and ex-England and Newcastle United footballer, Alan Shearer, in a case settled out of court.
Mark Bruce, Chief Investigator for the Insolvency Service, said:
“This is a particularly blatant example of common misconduct seen by the Insolvency Service.
“Mr and Mrs Neal plainly acted to improve their position, once the partnership was insolvent, while failing to honour either the prior decisions of the Financial Ombudsman or the protections put in by the FCA, specifically to stop such actions.
“Such conduct will invariably lead to disqualification.”