The Solicitors Regulation Authority (SRA) has stepped up its warnings on fraud, scams and cybercrime after several incidents involving solicitors and the loss of millions of pounds of client money.
Six solicitors have been sanctioned in the past two months for involvement in dubious investment schemes. One solicitor was struck off, three were suspended and another fined £40,000. In September, the SRA issued the latest in a series of warnings to the profession on this issue, but since then more than £35m of investors’ money has been lost in three cases.
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.”
The SRA has also issued a warning about cybercrime in the conveyancing sector, often occurring on Fridays. Some £7m of client losses have been reported in the past year. Criminals often hack into an individual’s email, altering the bank account details to divert the funds.
Frank Maher, partner at Legal Risk, said: “I have advised many firms over the years on problems caused by rogue partners (but hardly ever assistant solicitors) becoming involved in investment fraud, often swept up unintentionally in the excitement of receiving hundreds of instructions. Insurance coverage issues are rife—particularly aggregation, making cover inadequate. If they had thought about even that aspect, some might have gone no further.”
