LONDON: Britain's financial regulator on Thursday censured Premier FX, a now defunct company that once operated in Portugal, Spain and Dubai, for "seriously misleading" customers, failing to safeguard their money and for misusing its payment accounts.

The Financial Conduct Authority (FCA) said it would have imposed a substantial fine on the company if it had not already been in liquidation or owed its 136 creditors - most of which are consumers - roughly 9.2 million pounds ($13 million).

Premier FX was regulated by the FCA for money transfers. But it misled customers into believing it could also hold their funds indefinitely in secure, segregated client accounts, protected by Britain's financial services compensation scheme.

The FCA said Peter Rexstrew, the sole shareholder and director, controlled its operations, restricted access to its bank accounts and dealt with nearly all transactions. He died in 2018, when his children were appointed directors and the firm unravelled.

The FCA, which told lawmakers in early 2019 that its priority was to "find the money", said it had discovered "disorganisation and disarray". Funds were moved between Premier FX's accounts, and accounts were not used for their intended purposes, it said.

"We may never understand Peter Rexstrew's motivation for operating Premier FX in this way, using new customers' funds to pay existing customers or business expenses," said Mark Steward, the head of enforcement and market oversight at the FCA.

"Whatever the reasons for his deception, his scheme completely unravelled within a few weeks of his death, leaving a mess for others and losses for customers."

Rexstrew, a former foreign exchange trader in Britain, Singapore and Australia, moved to Portugal in 2005, sold his London home and invested the proceeds in a new foreign exchange business. His clients were often elderly Britons who either lived in Portugal or Spain or had holiday homes there.

In the weeks following his death, Premier FX directors realised the firm held insufficient funds to cover claims. They ceased trading and administrators were appointed in August 2018.