FRC OPENS FOUR PROBES INTO AUDITORS OF COLLAPSED LENDER MFS

The Financial Reporting Council has launched four investigations into accountancy firms and individual accountants connected to the audit of Market Financial Solutions, a mortgage lender that collapsed into administration in February. The FRC is investigating Magus Chartered Accountants, Berkeley Finch Limited, and Silver Levene (UK), as well as a number of individual accountants. The watchdog confirmed that the decisions to open the investigations were taken at a meeting of the FRC's conduct committee on 21 April. The probes will be conducted by the FRC's executive counsel.

Berkeley Finch, which audited Market Financial Solutions' 2024 financial statements, faces scrutiny over possible failures in the auditing process. The FRC is also reviewing the audit of Zircon Group Limited, a connected entity to Silver Levene, covering the same 2024 financial year. The investigation into Magus Chartered Accountants includes an examination of the conduct of two individual accountants from the firm. The FRC stated that opening an investigation does not indicate it has made, or will make, any finding of breach or misconduct.

Market Financial Solutions fell into administration in February following fraud allegations totalling £1.3bn. The lender had failed to repay that sum to a group of financial companies, and the UK's financial watchdog had already opened a separate enforcement investigation into the firm. Paresh Raja, who founded Market Financial Solutions in 2006, was subject to freezing orders issued by courts in both London and Dubai in March, requiring him to disclose his assets and restricting his spending to £5,000 per week without administrator consent. A software platform developed for the lender, described as an automated lending platform covering sales, underwriting, and identity checks, was subsequently put up for sale.