A firm has been fined £36,517 by the Solicitors Regulation Authority after it allowed money to be paid through its client account where there was no sufficient underlying regulated activity.
London-based firm Onside Law self-reported to the regulator that it may have breached accounts rules in respect of payments made on one client matter. The firm had been instructed by a long-standing corporate client to provide advice on the sale of a minority shareholding in another company.
The firm provided ‘only very limited advice’ on the transaction, the SRA said. It added: ‘Despite this, it had received and paid out $4,137,247.13 through its client account. The firm had subsequently become aware that some of this money did not belong to its client but had been received for and paid out to a third party (for whom it did not act).’
In a published outcome the regulator found that after the firm accepted more than $4m into its client account without sufficient underlying regulated activity, it paid $400,000 from its client account to a third party who was not a client. 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.
There was no evidence of lasting harm to consumers or third parties and no allegation that the firm had acted dishonestly or without integrity.
Fining the firm £36,517, the SRA said ‘a financial penalty was an appropriate and proportionate sanction’.
It added: ‘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 must also pay £600 costs.
