James Ramsden QC, acting for the Solicitors Regulation Authority, secured the conviction for professional misconduct of Margaret & Patrick Hetherington after a six day hearing before the Solicitors' Disciplinary Tribunal which concluded on 9th August 2021.
Both solicitors were struck off the Roll and ordered to pay £98,000 in costs to the SRA.
The case was one of the most important brought by the SRA in several years as it focussed on the role of solicitors as advisors in unregulated collective investment schemes frequently promoted to SIPP Trustees and where the solicitors acted under a referral agreement with the scheme promoter, Group First.
This scheme involved the acquisition of long leases in airport car parking spaces and self-storage pods. It collapsed into insolvency in 2018. In just under seven years prior to that, over £100m of investors' funds passed through the Hetheringtons' client account under retainers with nearly 7000 clients. The SRA alleged and the SDT found that Margaret and Patrick Hetheringtons had failed to give proper advice to their clients and had preferred their own interests over those of their clients. Patrick Hetherington was also found to have breached his duties as COLP and COFA of the firm.
Both solicitors were found to have acted dishonestly in breach of their professional obligations.
James Ramsden QC commented after the verdict: “This is an important decision for the profession. The preponderance of these schemes, often linked to lucrative referral arrangements, is a trend solicitors need to be very wary of. As SIPPs increasingly fail to provide adequate incomes in retirement SIPP trustees are susceptible to the allure of high return investment offerings. This was a complex investigation and tribunal which will provide clear guidance to solicitors on the ambit of their duties to advise generally on transactions that have the hallmarks of ultra-high risk or blatantly dishonest offerings.”
The Tribunal's full written reasons will follow.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
