Two experienced solicitors who led a north-west firm’s involvement with risky investment schemes have been ordered to pay the £135,000 costs of investigating them. In an outcome agreed with the Solicitors Regulation Authority and backed by the Solicitors Disciplinary Tribunal, Roger Coleman was fined £30,000 and Nigel Tarrant suspended for three years.
Tarrant, 64, a solicitor for 38 years, was a member at Colemans until August 2015 when it was taken over by national firm Simpson Millar. He was head of conveyancing there until he retired at the end of last year. Coleman, 60, was admitted in 1982 and was the Colemans senior partner until 2015.
Tarrant admitted causing or permitting the firm to act in relation to various complex overseas property development schemes which were outside the firm’s expertise, knowledge and experience. He also admitted failing to take sufficient steps to ensure that investors understood Colemans was not acting on their behalf or seeking to protect their interests.
Both Tarrant and Coleman admitted allowing the firm to act in carbon credits transactions where its involvement may have been viewed by investors as lending credibility to the transactions.
The Solicitors Regulation Authority began investigating Colemans in August 2013 following complaints from purchasers in investments schemes.
The subsequent allegations related to work over two four-year periods firstly involving 11 property schemes and secondly in relation to the trading of carbon credits. In total more than 560 investors deposited monies with Colemans. The property investment company, which had acquired sites in the likes of Turkey, Cyprus and Bulgaria, went into administration in 2010, with investors losing at least £12.5m.
The tribunal noted that Tarrant implemented the procedures and systems covering the work and supervised trainees and paralegals. Coleman was senior partner throughout the period.
In 2011, Tarrant had explained to administrators that the firm issued contracts to investors, dealt with client identification and money laundering regulations, checked the source or monies received from investors and exchanged contracts. Tarrant confirmed in 2015 to the SRA neither he nor the firm had experience of acting in foreign property investment work. He accepted he was entirely reliant on foreign lawyers to ensure the foreign law element of the transactions was dealt with properly.
The tribunal heard that Financial Services Authority had warned about the potential the carbon credits schemes were a scam. During the course of Colemans’ retainer, the firm received £14.8m into its client account from investors in more than 1,500 transactions. According to one complaint, the company offering the investment had talked up the involvement of Colemans and its regulated status.
In mitigation advanced by Tarrant and Coleman, they said neither had intended to breach any rules or principles, and there was no suggestion either acted without integrity, probity or trustworthiness.
Tarrant said he intended only to serve clients to the best of his ability, although it was accepted his failings were serious and this was a matter of ‘real regret’.
Coleman’s involvement was to attend a preliminary meeting and agree that the work could be taken on. Neither solicitor breached any position of trust or sought to make any personal financial gain from the matters complained of, with each co-operating openly and promptly with the SRA.
In a statement, Roger Coleman told the Gazette: ’By the time the investigation commenced, Colemans CTTS had terminated its retainer with one of these companies, and the other had been liquidated. Advising on such schemes was never a significant part of the firm’s work, and it is not a type of work we have engaged with since.
'There was never any intent to breach regulatory rules or principles, and there is no suggestion that anyone at Colemans CTTS acted without integrity, probity or trustworthiness. Nevertheless, as senior partner at Colemans, I now recognise, having co-operated fully with the SRA investigation throughout, that this was, with hindsight, work that we should not have taken on.’