The Solicitors Regulation Authority (SRA) is dealing with cases in which members of the public have lost “at least” £100m through investment scams involving law firms.
Scams using regulated law firms as middlemen, which were an issue in the late 1990s and early 2000s, are now appearing again on a frequent basis. Initial analysis by the SRA shows reports of scams have doubled in the past 18 months. The “investment schemes” often highlight the use of regulated law firms in promotional materials to appear more legitimate.
Two solicitors have been prosecuted at the Solicitors Disciplinary Tribunal in the past three weeks. Mandeep Dhariwal, of Lawcomm Solicitors, was fined £40,000 and ordered to pay costs of £20,000 after acting for six different companies offering investments in graphene, diamonds, oil contracts and films. Nearly £9.5m passed through the client account in relation to these investments. Mel Goldberg, of Mel Goldberg Law, was struck off for a range of breaches, including involvement in a suspected investment scam.
Many schemes involve the money being moved through client accounts before being transferred to the operators.
Paul Philip, SRA chief executive, said: “The evidence suggests this is a growing problem which can cause real misery for people looking to invest their savings.”
