A FORMER boss of an East Lancashire investment firm - which collapsed owing participants £2.67million - has been disqualified as a director for 13 years.

An investigation by the Insolvency Service found William David Clarkson, 66, ran Rawtenstall-based Equitable Law Capital (ELC) "with a lack of commercial probity" between November 2015 and November 2016.

In the beginning ELC marketed a legal redress scheme, where investors made loans based on claims management cases for bonds mis-selling, with returns of between 5.6 and 8.12 per cent promised.

Bosses at ELC would then lend these proceeds to a claim management firm, claiming the average settlement was initially £35,000, later revised down to £16,000.

In reality only a third of the money given over founds it way to the second company.

Insolvency officials say there was no evidence to suggest the claims firm (CMC) had any skills or expertise in the field.

And by March 2015 the Financial Conduct Authority had stepped in, voicing concerns that the scheme might be breaching financial regulations.

Insolvency investigators found the CMC returns were not sufficient to cover the sums due to investors and a shortfall began to build up.

Later the CMC also advised ELC that they were pursuing other business, apart from bonds mis-selling, outside the terms of their deal. Only two bonds claims had exceeded the £16,000 'average' advertised by ELC.

An inquiry estimated Clarkson, last known to be living in Threlfalls Lane, Southport, was paid £296,039 in ELC's final year, companies associated with a co-director got £123,6320 and the co-director £60,000.

An Insolvency Service spokesman said: "The current estimated position in the liquidation is a deficiency to investors of £1,347,875.

"This is increased to £1,551,518 if the full value of investor loan capital outstanding is included."