Solicitors Tribunal re Davies, Taman, Macnamara and Macnamara

Posted on 15/01/2017 · Posted in Investment, Uncategorized

In a recent order handed down by the Solicitors Disciplinary Tribunal, four solicitors of the firm Sanders & Co LLP were heavily fined and suspended from practice as solicitors for their personal involvement in a complex overseas investment scheme with the real estate company Ecohouse Developments Limited.

The Solicitors Regulation Authority alleged that the four solicitors had lent fake credibility to the investment scheme through the use of the Firm’s name, status and bank account, whereas in reality the scheme was completely outside their area of expertise and experience and there was no legitimate need for the involvement of a firm of solicitors in the scheme whatsoever. It was also brought to notice that a significant conflict of interest played in the background involving all the parties, as a result of which the solicitors had permitted payments into, and transfers or withdrawals from, the Firm’s client account that were not related to any underlying legal transaction or a service forming part of their normal regulated activities.

The need for justice grows out of the conflict of human interests.”
Thomas Nixon Carver

Calling it “a convoluted and complex scheme” the Tribunal found that “from its very inception, the scheme was riddled with conflict, with both sides wanting different things even though they also had common interests.” It also noted that the Firm had failed to provide adequate client care information to the investors and did not inform them about their right to seek independent legal advice before investing in this scheme.

The Tribunal then applied the test outlined in Hoodless and Blackwell v Financial Services Authority [2003] UKFTT FSM007 which emphasized that integrity “connotes moral soundness, rectitude and steady adherence to an ethical code” and was satisfied beyond reasonable doubt that the solicitors’ lack of transparency with the investors regarding their personal financial interests and involvement with Ecohouse had lacked integrity and amounted to a breach of their obligations under Principles 2, 3, 4 and 6 of the SRA Principles 2011.

In conclusion, the Tribunal held that “the misconduct was so serious that a Reprimand, Fine or Restriction Order would not be a sufficient sanction to protect the public or the reputation of the profession from future harm” and handed down an order of suspension of 12 months along with costs of £35,000, £17,500 and £10,000 respectively to the first three solicitors. The fourth solicitor being a trainee at the time of the incident and acting directly under the control and guidance of the others, was served no order.

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