Decisions filed recently with the Law Society (which may be subject to appeal)

Simon Sui Ping Hsu

Application 12181-2021

Admitted 1990

Hearing 3 August 2021

Reasons 26 August 2021

The SDT ordered that the respondent should be struck off the roll.

While in practice as a solicitor at Swan and Dale LLP, the respondent had (i) informed Ms W that £40,000 was required for payment of SDLT when that was not the case; (ii) had transferred, or caused to be transferred, £18,199 of client money to WCS without Ms W’s knowledge and/or a proper reason for making the transfer; (iii) had received £700 in client money from Ms W for the purposes of paying a deposit on legal fees and had not paid it into the firm’s client account and/or recorded the dealings with the client money properly or at all; (iv) misappropriated, or caused to be misappropriated, or otherwise misused, or caused to be misused, sums which his client had paid to the firm and/or the respondent in respect of the transaction, thereby breaching principles 2, 4, 5, 6 and 10 of the SRA Principles 2011 and/or rules 14.1, 20.1, 29.1 and 29.2 of the SRA Accounts Rules 2011. He had acted dishonestly.

He had failed to cooperate with the SRA’s investigation in not providing full and accurate explanations to questions from the SRA, thereby breaching paragraphs 7.3 and 7.4 of the SRA Code of Conduct for Solicitors, RELs and RFLs.

He had misled the SRA as to his whereabouts, thereby breaching principle 5 of the SRA Principles 2019 and rules 7.3 and 7.4 of the code. He had acted dishonestly.

The parties had invited the SDT to deal with the allegations against the respondent in accordance with a statement of agreed facts and outcome.

It was a serious case of professional misconduct which was aggravated by two admissions of dishonesty. The respondent had repeatedly used the claimed ill-health of his mother as a shield to try to deflect him from scrutiny by his regulator.

No exceptional circumstances had been put forward, and there was nothing in the material before the SDT that could be considered exceptional circumstances.

The respondent was ordered to pay costs of £35,171.

Meena Kumari and Teena Banga

Application 12163-2021

Hearing 21-23 June 2021

Reasons 17 August 2021

The SDT ordered that the first respondent (admitted 2000) should be suspended from practice for 24 months from 23 June 2021. Upon the expiry of that term of suspension, the first respondent should be subject to the following conditions: that she might not (i) practise as a sole practitioner or sole manager or sole owner of an authorised or recognised body, or as a freelance solicitor, or as a solicitor in an unregulated organisation; (ii) be a partner or member of a limited liability partnership, legal disciplinary practice or alternative business structure or other authorised or recognised body; (iii) be a head of legal practice/compliance officer for legal practice or a head of finance and administration/compliance officer for finance and administration; (iv) hold client money; (v) be a signatory on any client account; or (vi) work as a solicitor other than in employment approved by the Solicitors Regulation Authority, with liberty to apply to vary those conditions.

The SDT ordered that the second respondent (admitted 2013) should be suspended from practice for 18 months from 23 June 2021. Upon the expiry of that term of suspension, the second respondent should be subject to the following conditions: that she might not (i) practise as a sole practitioner or sole manager or sole owner of an authorised or recognised body, or as a freelance solicitor, or as a solicitor in an unregulated organisation; (ii) be a partner or member of a limited liability partnership, legal disciplinary practice or alternative business structure or other authorised or recognised body; (iii) be a head of legal practice/compliance officer for legal practice or a head of finance and administration/compliance officer for finance and administration; (iv) hold client money; (v) be a signatory on any client account; or (vi) work as a solicitor other than in employment approved by the SRA, with liberty to apply to vary those conditions.

The first respondent had caused or allowed her firm to act in conveyancing transactions which she knew or ought to have known, bore a number of suspicious features, the hallmarks of fraud, and the hallmarks of money laundering, thereby breaching principles 2, 4, 5, 6 and 10 of the SRA Principles 2011 and failing to achieve outcome 7.5 of the SRA Code of Conduct 2011.

She had failed to ensure that she and her firm had (a) carried out proper enquiries in relation to the transactions referred to above; (b) properly advised her clients regarding the payments to third-party companies; or (c) obtained her clients’ informed consent to make the payments to those third-party companies, thereby breaching principles 2, 4, 5, 6, 8 and 10 and failing to achieve outcome 1.2 of the code.

In relation to the transactions referred to above, the first respondent had entered into a referral arrangement and had received fee income as a result of that work in circumstances which had compromised her independence and that of her firm, and had accordingly breached principle 3.

The second respondent had acted in conveyancing transactions which she knew or ought to have known, bore a number of suspicious features, the hallmarks of fraud, and the hallmarks of money laundering, thereby breaching principles 2, 4, 5, 6 and 10 of the SRA Principles 2011 and failing to achieve outcome 7.5 of the SRA Code of Conduct 2011.

She had failed to ensure that she had (a) carried out proper enquiries in relation to the transactions referred to above; (b) properly advised her clients regarding the payments to third-party companies; or (c) obtained her clients’ informed consent to make the payments to those third-party companies thereby breaching principles 2, 4, 5, 6 and 10 and failing to achieve outcome 1.2 of the code.

The respondents had acted recklessly.

The first respondent was responsible for the supervision and direction of the second respondent and for the firm’s compliance with its obligations, both as the manager of the firm and as its compliance officer for legal practice (COLP), compliance officer for finance and administration (COFA) and money laundering reporting officer (MLRO). The second respondent had day-to-day conduct of the matters and was primarily responsible for communications with clients.

The first respondent’s culpability and the harm caused by her was very high. The second respondent’s culpability and the harm caused by her was high.

While the respondents’ actions had not been deliberately planned and calculated they had, through a reckless lack of care, facilitated others to take advantage of vulnerable people.

They had demonstrated genuine insight and they had made proper admissions. Neither the protection of the public nor the protection of the reputation of the legal profession justified striking off the roll.

The respondents were ordered to pay, on a joint and several basis, costs of £60,000.

Charles James Ete and Henry Onotere Mume

Application 12034-2019

Hearings 8-12 March, 1-3 June 2021

Reasons 26 August 2021

The SDT ordered that the first respondent should be struck off the roll. It ordered that the second respondent should be reprimanded, and that he should be subject to the following condition: from 3 June 2021 for an indefinite period, the second respondent might not be a head of legal practice/compliance officer for legal practice or a head of finance and administration/compliance officer for finance and administration without prior approval of the SRA.

While in practice as a partner at Charles Ete & Co Solicitors and Pride Solicitors Ltd, the first respondent had caused or allowed payments to be made from the firm’s client account which were made other than in accordance with rule 20.1 of the SRA Accounts Rules 2011; and were improper, thereby breaching principles 2, 6, and 10 of the SRA Principles 2011.

He had caused, allowed, or acted in transactions which bore hallmarks of fraud, in breach of principles 2, 6, and 10.

He had caused or allowed a minimum client account shortage of £1,236,335.64 to arise on the firm’s client account, which had not been replaced promptly on discovery or at all, in breach of principles 2, 6 and 10, and rules 6 and 7 of the rules.

He had caused or allowed the firm’s client bank account to be used as a banking facility in breach of principles 2 and 6, and rule 14.5 of the rules.

He had failed to exercise any or adequate supervision or control over an individual using the name of person A, in breach of principles 2, 6 and 8, and had failed to achieve outcome 7.8 of the SRA Code of Conduct 2011.

He had failed to take any or adequate steps to verify the identity and regulatory status of the individual using the name of person A before allowing said individual to practise as a solicitor, thereby breaching principles 6 and 8.

In 2018 he misled insurers in correspondence dated 10 July 2018 in breach of principles 2, 6 and 8 (it was further alleged as an aggravating feature that the alleged actions were dishonest);

He had failed to appoint a compliance officer for legal practice (COLP) and compliance officer for finance and administration (COFA) at Pride Solicitors, in breach of principles 7 and 8 and rule 8.5(b) and (d) of the SRA Authorisation Rules 2011.

He had failed to cooperate fully with the SRA and its intervention agents, in breach of principles 2 and 7.

The second respondent had, while in practice as a solicitor at the firm, failed to undertake his role as COFA effectively, and in accordance with proper governance and sound risk-management principles, in breach of principles 8 and 10, and in breach of rule 1.2(e) of the rules.

The SDT was not persuaded that any exceptional factors were present in the first respondent’s case, such that the normal penalty was not appropriate where there had been dishonesty.

It was a single episode of limited duration, in that it was one misleading answer on one form. However, it could not be described as a ‘moment of madness’ as the completion and submission of such a form was not a one-off instantaneous action but an action with several constituent parts. The first respondent’s culpability was high.

The second respondent’s culpability was relatively low. He had shown genuine insight. Public concern about the risk of future inadequate discharge of the COFA role, and the importance of that role, could be addressed by way of an indefinite restriction order which prevented the second respondent from undertaking that role (or the COLP role) without prior approval from the applicant.

The first respondent was ordered to pay costs of £64,260. The second respondent was ordered to pay costs of £7,140.

Silas Ogbonna and Topstone Solicitors Limited

Application 12206-2021

Hearing 18 August 2021

Reasons 9 September 2021

The SDT ordered that the first respondent (admitted 2009) should pay a fine of £12,500, and that he should be subject to the following condition: that he might not hold the position of compliance officer for legal practice, compliance officer for finance and administration, money laundering reporting officer or money laundering compliance officer in an entity regulated by the SRA for three years, to take effect 30 days from the date of the SDT’s order, with the liberty to apply to vary that condition.

The SDT ordered that the second respondent, a recognised body, should pay a fine of £15,000.

The first respondent had failed to cause the second respondent to conduct adequate due diligence on the clients involved in one or more of transaction 1 and transaction 2, and on the sources of funds received into the firm’s client account in respect of transaction 2, pursuant to regulations 27 and 28 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, thereby breaching principles 6, 7 and 8 of the SRA Principles 2011 and failing to achieve outcome 7.5 of the SRA Code of Conduct 2011.

He had failed to cause the second respondent to undertake enhanced due diligence measures or enhanced ongoing monitoring in respect of one or more of transaction 1 and transaction 2, pursuant to regulations 33(1) and 35 of the MLRs 2017, thereby breaching principles 6, 7 and 8, and failing to achieve outcome 7.5 of the code.

In failing to identify client A as a politically exposed person for the purposes of the MLRs 2018, he had failed to have in place appropriate risk management systems and procedures to determine whether the client was a politically exposed person, thereby breaching principles 6, 7 and 8, and failing to achieve outcome 7.5 of the code.

After transaction 1 had been aborted, he had caused or allowed a payment in the sum of about £37,865 to be made from the firm’s client account other than in relation to an underlying transaction and in doing so provided a banking facility in breach of rule 14.5 of the Solicitors Accounts Rules 2011, and principles 6, 7 and 8.

By reason of the matters above, he had failed to comply with his obligations as the firm’s COLP, in that he had failed to ensure compliance with the firm’s regulatory obligations and had failed to report material issues to the SRA contrary to rule 8.5 of the SRA Authorisation Rules 2011; and his obligations as the firm’s COFA, in that he had failed to ensure that the firm and its managers and employees had complied with the 2011 Accounts Rules, contrary to rule 8.5 of the 2011 Authorisation Rules.

The second respondent had failed to have in place an adequate documented assessment of the risks of money laundering to which its business was subject, as required pursuant to regulation 18 of the MLRs 2017, thereby breaching principles 6, 7 and 8, and failing to achieve outcome 7.5 of the code.

It had failed to have in place adequate policies, controls or procedures to mitigate and effectively manage the risks of money laundering as was required pursuant to regulation 19 of the MLRs 2018, thereby breaching principles 6, 7 and 8, and failing to achieve outcome 7.5 of the code.

It had failed to cause to be undertaken source of funds checks in relation to sums received into the firm’s client account in respect of one or more of transaction 1 and transaction 2, pursuant to regulations 27 and 28(11) of the MLRs 2017, thereby breaching principles 7 and 8, and failing to achieve outcome 7.5 of the code.

It had failed to have in place any or adequate systems or controls to prevent the firm’s client account being used to provide a banking facility, thereby breaching principles 7 and 8.

The parties had invited the SDT to deal with the allegations against the respondents in accordance with a statement of agreed facts and outcome.

The SDT had reviewed all the material before it and was satisfied on the balance of probabilities that the respondents’ admissions had been properly made.

The failures of the first respondent had caused significant harm to the reputation of the profession. The lack of due diligence undertaken had had the potential to open the gateway to financing terrorist activities contrary to the purpose of the MLRs and the responsibilities vested in him as COLP and COFA.

His failures were ‘very serious misconduct’ that warranted a fine of £25,000. However, the SDT noted his limited means and therefore reduced the level of the fine by 50%.

The first respondent was essentially the ‘controlling mind’ of the second respondent, making it culpable but to a lesser extent than the first respondent.

The respondents were ordered to pay costs of, respectively,  £6,250 and £3,750.