Two law firms have fallen victim to frauds of £7m after new business partners turned out to be bogus.
In both cases, the firms sought to branch out into different work areas. The fraudsters gave faked credentials to show their supposed expertise. Once appointed and away from supervision, the new colleagues appear to have stolen client money.
The Solicitors Regulation Authority (SRA), which is currently investigating the incidents, fired out a warning this week. It asked law firms to make sure they do their due diligence and check that the credentials of people approaching their firm are genuine.
The SRA said small firms, in particular, are being targeted. It reminded solicitors that they have a duty to run their businesses in accordance with ‘sound financial and risk management processes’ to protect client money and assets.
Paul Philip, SRA Chief Executive, said: ‘These recent cases show that there is no room for complacency and that undertaking careful due diligence for any potential employees is essential.’
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