Independent Derivative Traders’ directors get banned for accepting client money while insolvent

Four financial services directors got banned for 19 years after causing their company to take money from clients and make self-serving payments while being insolvent.

Paul Rossi, also known as Paolo Rossi, and his wife, Claire Michelle Rossi, were directors of Independent Derivative Traders Ltd. The company traded as ‘Futex’ and provided access to a financial markets trading platform for sub-contracted independent traders. The married couple were joined in the management of the company by Paul’s brother Mark Rossi, also known as Marco Rossi, and Daniel Michael Goldberg.

Independent Derivative Traders went insolvent in February 2016 due to difficult trading conditions and increased running costs, which meant it could not meet all of its liabilities.

The four directors received professional advice that all of Independent Derivative Traders’ creditors should be treated equally and the directors had an obligation to look after its creditors’ interests and not to worsen their position.

However, despite Independent Derivative Traders being insolvent, the company obtained deposits from two new traders totalling £75,000, which were then used in general trading, while also paying-out over £79,000 to Paul and Claire Rossi and an associated company.

The company went into liquidation in November 2016 and the Secretary of State has since accepted disqualifications undertakings from Mark Rossi (eight years), Paul Rossi (six years), Daniel Goldberg (three and a half years) and Claire Rossi (two years) for their various roles in causing or allowing the company to take money from clients and make self-serving payments while being insolvent.

Daniel Goldberg’s ban started on September 11, 2018, while Mark, Paul and Claire’s disqualifications are effective in February 2019 and their disqualifications mean the four directors are banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.

The matters of unfitness that Paul and Mark Rossi did not dispute were:

“I caused Independent Derivative Traders Ltd (“IDT”) from 22 February to 5 April 2016 to make net transactions of approximately £79,184, to the benefit of Paul Rossi and associated parties and the comparative detriment of un-associated creditors, whilst I knew, or ought to have known, that IDT was insolvent and after IDT had received professional advice that all creditors should be treated equally.”

“I caused [Paul Rossi: “allowed”] Independent Derivative Traders Ltd (“IDT”) from 14 April to 12 May 2016 to obtain deposits of £75,000 from 2 customers, to their unreasonable risk and ultimate detriment, whilst I knew, or ought to have known, that IDT was insolvent and after it had received professional advice that IDT’s directors had an overriding obligation to look after the interests of its creditors and not to worsen their position.”

The matters of unfitness that Claire Rossi did not dispute were:

“I abrogated my duties as a director of Independent Derivative Traders Ltd (“IDT”) from 22 February to 5 April 2016. In this period, whilst I ought to have known that IDT was both insolvent and had received professional advice that all creditors should be treated equally, IDT made net transactions of approximately £79,184, which were to the benefit of myself and associated parties and to the comparative detriment of un-associated creditors.”

The matters of unfitness that Mr Goldberg did not dispute were:

“I abrogated my duties as a director of Independent Derivative Traders Ltd (“IDT”) from 14 April to 12 May 2016. In this period it obtained deposits of approximately £75,000 from 2 customers , to their unreasonable risk and ultimate detriment, whilst I knew, or ought to have known, that IDT was insolvent and after IDT had received professional advice; both that its directors had an overriding obligation to look after the interests of its creditors and not to worsen their position.”