Legal Professional Barred For Losing Client Money In Dodgy Investment

On 27th February 2023 the Solicitors Disciplinary Tribunal released its judgment for the consumption of the wider public in which had the effect of barring a legal professional from acting as a qualified solicitor and erasing his name from the Roll of Solicitors due to evidence that appeared to suggest that she had unprofessionally sent just shy of one quarter of a million pounds to her own private banking facility from a designated banking facility dedicated to use on client matters. If this was not serious enough, the Solicitors Disciplinary Tribunal appears to have wanted to make an example of the legal professional and deter future unprofessional behaviour as she appears to have plowed the monies now held in her own private banking facility into a fraudulent investment scheme.  

What Happened In The Case?

All appeared to have been progressing well for the legal professional until then and acted as a solicitor for approximately fifteen years. She had been acting as a Compliance Officer for Legal Practice and Compliance Officer for Finance and Administration and was the only person permitted to sign-off from the banking facilities maintained by the legal services provider. The solicitor was aware that it was not permitted to deal with investment activity. 

Be Sure Your Sins Will Find You Out…

However, when the Regulator examined the case it discovered that the legal professional had inexplicably treated the monies as her own personal monies by dishonestly sending it to her own personal banking facility. She then decided to plow the monies belonging to a client into a sham investment vehicle. When the lawyer realised that all the monies she had flooded into the venture had been lost, she notified the law enforcement authorities in an effort to retrieve the monies. In the interim, the legal professional had admitted to the client that their monies had been lost and promised to repay them. The client had not received the monies after six weeks and submitted a formal complaint. When no payments were forthcoming the client applied to the recompense scheme set up by the industry regulator.   

What Did The Solicitors Disciplinary Tribunal Say?

Eventually the regulator confronted the legal professional about her behaviour observing that she had neglected in her professional duties by hoodwinking the regulator and the insurance provider by giving a deceptive impression regarding how the monies had disappeared. She had also fallen short in her duty to communicate to the regulator that clients had made complaints. It was also damning over the legal professional’s decision not to honestly inform the client promptly and fully communicate regarding the disappearance of the monies. The SDT were damning over the legal professional’s cavalier attitude towards the money. She appears to have used the monies as a personal borrowing facility with a very loose arrangement as to when she should repay it. As long as she believed that she could return the monies then this was seemingly fine as far as she was concerned.                

Lessons Learned?

This is an example of unprofessional conduct that legal professionals should avoid. They need to remember that monies held in client account: 

  • are sacrosanct
  • should be held in a designated client banking facility
  • separate to any other monies complying with the Solicitors Accounts Rules by keeping comprehensive payment records and 
  • should not be transferred to the private banking account of a legal professional or 
  • should not be plowing monies into dodgy precarious investment vehicles.   

If you have experienced something similar, or have an opposing viewpoint, please kindly leave a comment on the article or contact us.  

ASSESSING FIRMS

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