• Application 11576-2016
  • Hearing 20-29 November 2017
  • Reasons 12 January 2018

The SDT ordered that the first respondent (admitted 1989) should be struck off the roll, and that the second respondent (admitted 2008) should be suspended indefinitely.

The first respondent had caused or permitted T to accept, and use, monies received from an investment fund totalling £5,920,225, in circumstances where it was improper for him to do so, in breach of principles 2 and 6 of the SRA Principles 2011. He was dishonest.

He had failed to ensure that the sum was paid into client account, alternatively to ensure an office account was opened whose sole purpose was to hold the monies pending their use for an authorised purpose, contrary to principles 2, 6, 8 and 10 and to rules 1.2(a), 1.2(b), 6 and 14.1 of the SRA Accounts Rules 2011. He was dishonest.

He had assisted the conduct of the investment managers despite being on notice of the serious risk that they were acting fraudulently, in breach of principles 2 and 6. He was dishonest.  

He had caused or permitted false and misleading representations to be made to the investment fund and its representatives for the purpose of persuading them to provide funding to T, alternatively by failing to review or review properly the relevant application form, in breach of principles 2 and 6. He was dishonest.  

He had improperly signed an agreement for the purchase by T of the business and assets of S, improperly transferred £2,000,000 of Axiom funding from S’s office account to T’s, and improperly allowed the said monies to be used by T, in breach of principles 2, 6 and 10 and rules 1.2(a), 1.2(b), 6 and 14.1 of the rules. He was dishonest.

He had given instructions for a redundancy exercise at S which disregarded statutory consultation requirements, in breach of principles 1, 2 and 6.

He had improperly authorised the transfer of £1,700,000 from T to CE or CEIM in breach of principles 2, 3, 6 and 8. He was reckless.

He had made an improper proposal to co-own a solicitors’ firm with non-solicitors, prior to any application for or approval of ABS status, in breach of principles 2 and 6. He was dishonest.

He had instructed or advised his personal assistant to give a chartered accountant a false and misleading answer concerning 24/7 CC in breach of principles 2 and 6. He was dishonest.

He had provided the applicant with false and misleading responses concerning the availability of F documentation in breach of principles 2 and 6. He was dishonest.

He had falsely denied at his SRA interview that he had received a financial benefit out of C, in breach of principles 2 and 6. He was dishonest.

He had failed to deal with the SRA in an open, timely and co-operative manner, in breach of principles 2, 6 and 7, and outcomes 10.1, 10.8 and 10.9 of the SRA Code of Conduct 2011. He was dishonest.

The second respondent had failed to ensure that the aforesaid was paid into client account, alternatively to ensure an office account was opened whose sole purpose was to hold the monies pending their use for an authorised purpose, contrary to rules 1.2(a), 1.2(b), 6 and 14.1 of the rules. She had failed to make any or sufficient proper inquiries to establish the propriety of the asset purchase agreement relating to S before signing it, in breach of principle 6.

She had carried out, without protest or objection, a redundancy exercise at S which disregarded statutory consultation requirements, in breach of principles 1, 2 and 6.

She had failed to deal with the SRA in an open, timely and co-operative manner in breach of principles 2, 6 and 7, and outcomes 10.1, 10.8 and 10.9 of the code.

She had abrogated her responsibilities as director and principal of T, in breach of principles 3, 6 and 8.

The seriousness of the first respondent’s misconduct was at the highest level, such that a lesser sanction than strike-off was inappropriate. There were no exceptional circumstances.

The second respondent had been bullied, lied to and manipulated by the first respondent. However, her almost complete lack of insight as to her own culpability had to be considered.

The first respondent was ordered to pay £108,371 costs; the second respondent £42,056.