The disqualifications, which run from 28 May 2013, follow an investigation by The Insolvency Service. The petition to disqualify the men was brought on behalf of the Secretary of State for Business Innovation and Skills.

Roland Witton, 63, became a director of DSL in November 2005, while Daniel Witton, 38, became a director in May 2008. They were disqualified for three years and seven years respectively. DSL, a stock brokerage company authorised by the Financial Services Authority (FSA), went into administration on 12 April 2011.

The investigations showed that the two directors had demonstrated a cavalier and reckless attitude towards their obligations as imposed by the FSA. Although Roland had been abroad for much of the period of his directorship, the Court found that he had neglected his responsibilities as a director.

In February 2010 the FSA fined DSL £101,500 for breaching FSA principles in the way it was organised and controlled, with particular reference to its regard for and the fair treatment of the interests of customers, and the protection of client assets.

Following the fine, DSL did not comply with FSA Client Asset Rules and failed to put client money in a separate bank account or to ensure sufficient clients funds were retained to meet obligations to the clients.

On 29 March 2012, the Financial Services Compensation Scheme (FSCS), run by the FSA declared DSL to be in default of its obligations to its clients, and by 17 December had made over £2 m in compensation to claimants. DSL was placed into administration on 12 April 2011 with nearly £12 million owed to clients.

Clive Tranter, Head of Company Investigations North East and Edinburgh, commenting on the disqualification of Daniel Alexander Witton said;

“In this case the director failed to ensure that DSL complied with the legislation and industry regulations which existed to protect the interests of the companys clients. As a result of that inaction, 3rd party client investors have suffered significant losses.

The Insolvency Service will use the disqualification legislation to protect the public from such failures .

In relation to the disqualification of Roland Witton, Clive Tranter said:

“By his inaction, this director failed to ensure that DSL complied with the legislation and industry regulations which existed to protect the interests of the companys clients. As a result of that inaction 3rd party client investors have suffered material loss.

The Insolvency Service will use the disqualification legislation to protect the public from directors who by their inaction allow wrongdoing by others.