A London firm that deals with professional sporting clientele has been fined £36K after reporting itself to the Solicitors Regulation Authority(SRA) after funnelling $4million through a client account which was paid out to a third party.
Onside Law LLP reported themselves to the SRA in November 2022 for a possible breach of accounts rules in respect of payments made in and out of it’s client account on one client matter. In June of the previous year the firm had been instructed by a long standing corporate client to provide advice on the sale of it’s minority shareholding in another company. But the firm provided limited advice on the transaction and proceeded to pay out $4,137,247.13 through the client’s account.
There was no evidence of lasting harm to anyone and no suggestion that the firm had acted dishonestly or without integrity but the SRA decided on a fine to reprimand Onside LLP. The firm was directed to pay a financial penalty of £36,517 and ordered to pay costs of £600.
On 9 July 2021, the firm accepted $4,137,247.13 into its client account when there was no sufficient underlying regulated activity, then on 22 July 2021, the firm paid $400,000 from its client account to a third party who was not a client of the firm. Between 14 July 2021 and 22 July 2021, the firm paid $3,737,247.13 out of its client account in circumstances where there was no sufficient underlying regulated activity. In doing so, the firm breached rule 3.3. of the SRA Accounts Rules 2019 and Principle 2 of the SRA Principles 2019.
The SRA said : “This was because, by reference to the factors in the SRA Enforcement Strategy: The findings were of greater than moderate seriousness. While there may have been an argument for agreeing to act for a long-standing client at first, by the time the money was paid into the firm’s client account it was apparent that very little work had been done. The firm’s conduct involved breaches of principles and rules which were designed to mitigate misuse of the client account and encourage and protect the trust in the profession. This conduct, inherently, has the potential to cause harm, whether or not such harm occurred in this specific context or not. Any lesser sanction would not provide a credible deterrent to the firm, and others. A credible deterrent plays a key role in maintaining professional standards and upholding public confidence.”
The financial penalty was reduced by 30% in recognition of the fact that the firm had self-reported the conduct to the SRA, co-operated with the investigation and made some admissions in respect of the allegations.
The SRA concluded:
“We have fined the firm for allowing money to be paid through its client account in circumstances where there was no sufficient underlying regulated activity”.
