A compliance officer who ignored her management duties while her fellow partner made hundreds of improper payments has been fined. Susan Marziano took no part in the financial management of east London firm MKM Solicitors over almost five years during which her colleague made 204 transfers of more than £510,000 in client money.
The Solicitors Disciplinary Tribunal heard that Marziano admitted abrogating any management responsibility and failing to maintain proper accounting records or to have systems in place to maintain compliance with accounts rules.
Marziano, 60, a solicitor for 17 years, was fined £20,000 in an agreed outcome with the Solicitors Regulation Authority approved by the tribunal earlier this month.
MKM Solicitors was shut down in 2017. The tribunal heard that Marziano had overarching responsibility for the business but left this all to her partner, leaving him free to undertake a series of improper transactions. Several were worth more than £40,000 each and a large number of payments were made to gambling sites and a casino. Separate disciplinary proceedings are ongoing involving the other partner.
A series of accounting failings allowed this misconduct to continue: bank reconciliations were said to be ‘materially deficient’ because they did not include a figure for client liabilities, the client matter list did not include any matters with a nil or debit balance, and procedures for identifying client money were not in place.
Investigators were unable to determine the true position of the shortfall in the client account or to calculate whether the firm had sufficient funds to meet client liabilities.
Marziano told the tribunal she had ‘total trust’ in her partner and she acted in good faith entrusting financial control to him. It was considered he had the necessary skills and competence in financial matters to mean he should retain responsibility for this. She accepted she should have taken a more active role but said the misconduct was deliberately concealed from her in a ‘sophisticated and sustained manner’.
The tribunal noted that affected clients had to make claims on the compensation fund to recover their money and Marziano’s actions had to be classed as ‘very serious’. She was ordered to pay £14,000 costs.