The Respondent was an owner, member, COLP and COFA of the Firm. The Firm acted for a number of clients who had agreed to purchase properties through a property development company called Aronex. Aronex was set up to build high-specification, mixed use residential properties which would be sold to investors on a leasehold basis.

Aronex started to suffer a decline in cash flow due to the costs associated with obtaining planning permission for its development projects and declining overseas investment. The company was placed into administration and ceased trading in November 2019. Aronex properties were consequently never completed, which led to investors losing their deposit monies.

The Applicant was notified of the Firm’s involvement in the failed scheme by investor clients and commissioned a forensic investigation which commenced in August 2021 and ultimately resulted in a detailed report dated 25 April 2022.

The investigation identified that the Respondent and the Firm had significant connections with Aronex. The Respondent’s wife was a director of Aronex and two employees of the Firm were similarly directors of Aronex. The Firm was also the landlord of the leased premises occupied by Aronex.

The Applicant therefore alleged that the Respondent had represented clients in circumstances where he knew, or ought to have known, that there was a conflict of interest. Further that he failed to adequately advise clients involved in the development projects of the risks inherent in such investment schemes and failed to ensure clients fully understood those risks.

All transactions followed the same format with approximately 70% of the purchase price being paid over to Aronex prior to completion. The Applicant alleged that the Respondent failed to ensure that his clients were informed about issues regarding planning permission prior to releasing his client’s funds to Aronex.

The Applicant also alleged that the Respondent had failed to provide supervision to a junior staff member representing clients in relation to the development projects.

The Tribunal found all allegations proved and ordered that Respondent be suspended from practice as a Solicitor for a period of 6 months to commence on 5 February 2025.

The Tribunal also ordered that the Respondent do pay the costs of and incidental to this application and enquiry fixed in the sum of £40,218.40.