Private investors with money and shares frozen at Pacific Continental Securities may have to wait until the end of October before they learn if they’ll get anything back. Administrators at Smith & Williamson made an application to the courts last Wednesday (15 August) asking for more time to complete their investigation into the failed stockbroker’s accounts.

The administrators have been unable to access a computer system containing details of the underlying holdings within Pacific Continental’s nominee accounts, within which all customers’ shares are pooled. The system was supplied by one of Pacific Continental’s creditors, which has not been co-operating.

The administrators are also having problems reconciling 12-13 bank accounts, within which customers’ cash is held. Joanne Milner, the administrator working on the case, says: ‘We can see from looking at bank statements that some money has come from the company’s current account into client accounts. We are looking for an explanation for all payments.’

Under Financial Services Authority (FSA) rules, all client money should be kept in separate accounts and has to be returned, along with shares, before any distribution is made to the creditors. In the event that there are not sufficient funds/shares then former customers will rank alongside creditors for a share of what is left.

Regulations stipulate that the administrator has to send proposals to creditors within eight weeks of starting the process. Since Pacific Continental went into administration on 20 June that would have mean the report was due last Wednesday. The extension application was made so checking of customer cash and share accounts can continue.

Milner comments: ‘We have applied for an extension to the end of October to hold the creditors’ meeting, hopefully it won’t take as long as that, but this gives us space to get things moving and hopefully completed in relation to the reconciliation.’