The Solicitors Regulation Authority has again warned solicitors against involving themselves in investment schemes after a rash of Solicitors Disciplinary Tribunal verdicts.
Five practitioners have been hauled before the tribunal in relation to investment schemes since the start of October; one was struck off, three suspended and a fifth fined £40,000. The solicitors involved had 21 days to appeal following publication of judgment.
Another solicitor in Yorkshire was jailed for eight years for his involvement in scams that tricked members of the public into investing in fraudulent schemes.
The SRA has previously made warnings to solicitors about lending credibility to investment schemes – and prosecutions have been partly based on practitioners ignoring such warnings – and the regulator yesterday took the chance to reiterate its message.
‘There is a real risk to both the public and the reputation of the profession caused by the involvement of solicitors in helping investment schemes that might well be frauds,’ said the SRA. ‘We know the vast majority of solicitors and law firms would not knowingly become involved in such schemes, but you should all be aware of the signs. We have seen many different types of investment scheme fail.’
The SRA said dubious schemes range from old-fashioned ‘bank instrument’ frauds, where investors are promised huge returns from a ‘secret’ banking market, to unusual investments with returns much higher than those available on the high street.
Investors have been promised dividends from stakes in graphene, diamond trading, overseas agricultural rights, carbon credit trading and hotel room purchases.
The SRA said the reputation of solicitors and law firms attracts fraudsters looking to use their involvement to give the impression of credibility or security.
‘We are aware that some solicitors believe that they can act in these schemes as long as they limit their involvement,’ added the regulator. ‘They should not. The “limited retainer” argument does not protect a solicitor from committing serious misconduct or acting dishonestly by facilitating a scheme that might be a fraud.’