Hudspiths liquidator reports, funds “apparently misappropriated by directors”

The administrators of the collapsed forex Ponzi Hudspiths Limited have released their first full report after being appointed.

Hudspiths launched in 2015 and promised to pay investors 5% per month while paying its introducers 2% per month. There is no evidence that it ever had any means to generate returns of 7% per month (after costs) from its capital (because there’s no such thing), meaning that Hudspiths constituted a Ponzi scheme.

It collapsed in 2018. Investors defeated an attempt by its directors to cover their tracks by putting the company into voluntary liquidation; instead the company was put into compulsory liquidation in 2019 with the aim of having a better chance of finding where the money went.

Contrary to sex shop owner and Hudspiths director’s Karl Lubienicki, who claimed to the Daily Mail “There’s no money missing. You can’t hide £50million” and that only £7.5 million was outstanding to Hudpsiths creditors, the administrators report that £85 million of claims have been received from 153 creditors. In the original Statement of Affairs, there were only 109 creditors with debts totalling £41 million.

Some of the increase to £85 million might result from investors trying to include their imaginary Ponzi returns in their debts, but the number of creditor claims ballooning by 40% seems likely to be a factor as well.

The administrators have taken legal action against the directors (Lubienicki and Lancelot Hudspith) alleging misappropriate of funds.

We also took immediate legal action against the former directors of the company to protect the interest of creditors. The claim relates to monies which appear to have been misappropriated by the former directors and is based on the very little information we have been provided in the books and records of the company.

So how does 40 / 50 / 85 million not disappear?

The directors’ original statement of affairs detailed the following assets:

  • A £4.4 million investment into ATFK Training Ltd, a shell company which dissolved without filing accounts
  • A £1.9 million investment into an unspecified company, and £500,000 invested in various entities; however these investments were made in the name of one of the directors and not by the company itself
  • £580,000 in a trading account; however when the administrators opened the box, it had been cleared out
  • £59,600 of cash in the bank, which has been recovered
  • Some trivial amounts in machinery, fixtures and fittings

These of course only total £7 million odd even if they were recovered – which of course isn’t going to happen. Where the other tens of millions invested in Hudspiths has been not-hidden is currently unclear.

7 thoughts on “Hudspiths liquidator reports, funds “apparently misappropriated by directors”

  1. Let’s be factual so the public see the truth.

    £10.8m paid in by clients
    £4.4m put into trade
    £400k invested
    £560k invested
    £260k invested
    £3.01m paid to introducers
    £168k paid to one director over 4yrs
    £257k nett paid to one director over 4yrs
    £9.4m paid back to clients £3.2m of which was from one of the directors personally.

    Get the facts straight before ruining people’s lives. Where was the £10’s of millions of pounds invested that you discuss? £10.8!

    And that director does not own a sex shop.

  2. R Smith: The introducers were paid 3% not 2%!!

    It isn’t unusual for Ponzi schemes to pay different rates of commission to different introducers.

    Jim tiler: £10.8m paid in by clients
    £4.4m put into trade
    £400k invested
    £560k invested
    £260k invested

    You should probably make your mind up before banging on about “getting the facts straight”.

    £3.01m paid to introducers
    £168k paid to one director over 4yrs
    £257k nett paid to one director over 4yrs

    Ok, let’s spend some time in your world for a moment. £10.8 million minus that lot leaves £1.75 million unaccounted for. What did they do with the other £1.75 million, bearing in mind they needed to generate returns of 7% per month so every penny needed to be working its arse off, and leaving a sixth of funds in the petty cash box doesn’t compute?

    Where was the £10’s of millions of pounds invested that you discuss? £10.8!

    Take it up with the liquidators if you think their figures are wrong.

    And that director does not own a sex shop.

    That factoid was sourced from the Daily Mail’s 2019 article (which still stands without any correction). Take it up with them.

  3. As an ex employee of the above mentioned company I would love to set a few things straight.

    I have no bias toward either the creditors or the directors and believe there has been wrong doing on both sides.

    1. There is evidence that a certain portion of the funds were indeed traded on the FX market. I understand this to be over 50% of funds taken in but I cannot quote exact numbers given this is not my area.
    2. I would suggest you be very careful by jumping to the conclusion that Hudspiths was as you put it “a Ponzi scheme”. Has there been evidential proof or written confirmation from a Lawyer, Judge, or Liquidator to say that this is 100% the case? I certainly haven’t, and as a legitimate creditor with unpaid wages I have received no communication whatsoever from Monahans since their appointment.
    3. The directors did indeed attempt to put the company into a voluntary liquidation under the advice of lawyers at the time. This is not as you put “hiding their tracks”. Liquidators have to abide by a very strict rule book and ensure that any issues are sorted. UHY Hacker Young (an auditing/liquidation giant) are hardly in the business of trying to help cover two directors tracks…
    4. The issue of the statement of affairs and bogus claims is humorous to me. For some reason multiple people believe Hudspiths owe them money when they in fact sent it to a totally different company with totally different directors. That’s like signing a contract for an Audi, paying Audi, and then trying to claim your money back from another car brand who have gone bust to try and take advantage of a situation.
    Again, I am sure the liquidators will get to the bottom of the amounts, but as far as I understand, they have all the company bank statements, and the personal statements of the two directors. From my view of matters, the numbers mentioned in this thread are grossly inflated and totally inaccurate in the real world.

  4. Umm Brev

    Try your Maths again……you forgot the £9.4m that went back to clients. So in affect the company took £10.8m and gave out c.£18m on the basis that we know most of the £4m+ was lost in trading. From the three smaller investments there is c.£2.3m which is identified, but just needs to be recovered. Strangely Monahans the current liquidators haven’t attempted to get these funds back, or speak to the unregulated introducers who always seem to get away with stuff like this.

  5. 1. There is evidence that a certain portion of the funds were indeed traded on the FX market. I understand this to be over 50% of funds taken in but I cannot quote exact numbers given this is not my area.

    So according to you, Hudspiths actually needed to generate returns of 14% per month (if we stick with the figures I have of 5% per month returns to clients and 2% per month paid to introducers). If you’re paying returns of 7% per month but only 50% of funds invested are deployed into the investment, a rate of return of 14% per month on the amount actually deployed is needed to pay the returns due.

    2. I would suggest you be very careful by jumping to the conclusion that Hudspiths was as you put it “a Ponzi scheme”. Has there been evidential proof or written confirmation from a Lawyer, Judge, or Liquidator to say that this is 100% the case?

    Feel free to present any evidence that Hudspiths had any means to consistently generate returns of 14% per month from forex trading.

    If Hudspiths was not generating sufficient returns from its forex trading to pay the rates it offered, returns to investors were paid by shuffling around investors’ money. Using new investors’ money to pay existing investors constitutes a Ponzi scheme.

    The directors did indeed attempt to put the company into a voluntary liquidation under the advice of lawyers at the time. This is not as you put “hiding their tracks”. Liquidators have to abide by a very strict rule book and ensure that any issues are sorted.

    Take it up with Hudspith’s investors and the High Court. Strict rule book or not, the investors were not satisfied with the lower disclosure requirements that a voluntary liquidation has compared to a compulsory one. The High Court was satisfied that they had sufficient grounds to grant their application.

    4. The issue of the statement of affairs and bogus claims is humorous to me. For some reason multiple people believe Hudspiths owe them money when they in fact sent it to a totally different company with totally different directors.

    If and when the liquidators announce that in their updates, it’ll be reported here.

  6. Try your Maths again……you forgot the £9.4m that went back to clients.

    No I didn’t. £10.8m is put in by clients. That is used to fund the forex investment after paying costs and the directors’ income. Then funds paid to clients should have come from the profits from the forex investment.

    Let’s by clear, are you saying that Hudspiths paid “returns” to clients which was in fact their own money coming back to them, rather than returns from forex trading?

  7. “10m paid in by clients” and “3m in commissions to introducers” doesn’t sound like 3% to me.

    Do the directors still own that million dollar yacht in Mallorca?

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