A former law firm director who acted for the operators of a dubious investment scheme was reckless and incompetent but not dishonest or lacking in integrity, a tribunal has ruled.

Colin Peter Dixon, who was partner and director of Leeds firm Dixon Law Limited, was suspended for six months by the Solicitors Disciplinary Tribunal and ordered to pay almost £59,000 in costs.

Dixon, a solicitor for 26 years, acted for a property development organisation, as well as its associates, involved in a scheme to buy low-value properties before they were marketed for sale. The scheme sought an investment of £20,000 from investors who could choose to exit it after week 10, at which stage they would have been reimbursed their initial outlay as well as a £5,000 fee. The tribunal heard the return of funds was being financed through 'new' investors who entered the scheme - the classic trademark of a Ponzi investment.

The SRA, prosecuting, submitted the scheme was 'wholly implausible commercially and plainly dubious', and Dixon should have spotted 'red flags'. 

Dixon stated that it was his first involvement in a property investment scheme, he had met with the associates, and he did not have day-to-day conduct of the files. 

The tribunal concluded that Dixon did not present as a solicitor with a tendency towards non-compliance, and he appeared to have been trying his best to 'get it right'. While he had also risked a conflict by acting for investors in the scheme in a limited capacity, he had advised them to seek independent legal advice. 

The SRA submitted that Dixon acted dishonestly, but this was denied and the tribunal ruled that Dixon genuinely thought the scheme was credible.

Having found his conduct to be reckless and 'manifestly incompetent', the tribunal said Dixon should not be struck off the roll. The finding of incompetence related only to his involvement in the scheme and he had an unblemished record previously. It was also took account of a 'significant' delay by the SRA in bringing proceedings after the matter came to its attention in 2012. 

Justine Wardle, a paralegal with Dixon Law, was also charged in relation to the investment scheme. She did not attend the hearing and was prevented from working with any regulated firm again without SRA approval. She must pay £2,500 costs.