SRA repeats warning as solicitors face tough sanctions for £35m of investment fraud
The Solicitors Regulation Authority (SRA) has flagged that six solicitors have been sanctioned in the last two months for involvement in dubious investment schemes as it publishes a detailed Risk Outlook update for solicitors about the risks of such schemes.
The SRA has issued a series of warnings to the profession on this matter, most recently in September. Since then, there have been three cases which the SRA has taken to the Solicitors Disciplinary Tribunal, where investors have lost a total of more than £35m. O
ne solicitor was struck off, three solicitors were suspended, and another fined £40,000. Cost orders totalling more than £120,000 were also imposed on the five solicitors.
And a solicitor in Yorkshire has also been jailed for eight years for fraud and money laundering, after being used to give credibility to an investment fraud totalling more than £5 million.
The SRA’s Solicitors and investment fraud aims to help solicitors identify potential frauds. Those operating dubious schemes seek the involvement of solicitors to give their scams an impression of credibility or security. It includes case studies where action has been taken against solicitors, as well examples of good practice to make sure solicitors do not become involved in any way, even unwittingly, in these schemes.
Six further cases of suspected involvement in investment schemes have been reported to the SRA in the two months since it published the further warning notice on 21 September. This compares to 18 in the previous 18 months.
Paul Philip, SRA Chief Executive, said: “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. The marked increase in reports to us of suspected involvement in these schemes shows that raising awareness is key. “Unfortunately the small number of solicitors who abuse their position of trust can do great damage, not only to the public but also to the profession. We will continue to take robust action where solicitors have not met their professional obligations.”
Solicitors and investment fraud is available at: http://www.sra.org.uk/risk/resources/investment-fraud.page
The SRA’s September warning notice is available at: www.sra.org.uk/sra/news/press/investment-schemes-warning-notice-2016.page
The SRA has also recently warned the public about the risk of such schemes: www.sra.org.uk/sra/news/press/investorscam-consumer-warning-2016.page