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SRA Lawyer: Specialist barrister advising on boiler rooms

SRA Lawyer: Specialist barrister advising on boiler rooms and financial promotions in compliance, investigations and SDT hearings. For more advice call Jeremy on 0844 2722322.

Solicitors often need an SRA lawyer for cases before the courts, the Financial Services and Markets Tribunal and the Solicitors Disciplinary Tribunal.

The Court of Appeal have recently set out guidelines for law firms who wish to involve themselves in financial promotions. In 2009 Lord Justice Lawrence Collins issued a judgement warning of the dangers for professional persons (and for financial institutions) whose names are used for specific statutory purposes, but also to add respectability or credence to financial documents. He described the firm in question as ‘ a medium sized firm in Leeds without any experience in international securities law’, a clear indication that this type of work should, in his view be conducted by ‘magic circle’ and other similar sized law firms.

In a decision in 2005, following an action by the FSA, the High Court ruled that two London based solicitors were involved in ‘boiler room’ activities in the UK and ordered them to repay money to investors. Again the solicitors were operating a form of escrow service for the potential investors. Her Honour Judge Alton gave a similar warning about solicitors and other professional advisers giving an air of respectability and propriety to unregulated investments.

The FSMT has imposed substantial fines for firms and individuals involved in financial promotions that have resulted in loss. For example, in one case, the firm and the senior partner were fined £400k and banned from working in financial services.
Jeremy has represented solicitors before the SDT where some of the issues related to financial promotions. Following detailed submissions, a reprimand was imposed as it was shown that a number of appropriate steps were taken including the obtaining of Leading Counsels advice.

Guidance for SRA lawyers is available on the Law Society website with this warning:
‘The message to solicitors is clear: FSA-authorised firms must be satisfied that any promotional material that they are asked to approve for third parties satisfies the FSA's requirements and is clear and not misleading.. Involvement in such scams will very likely infringe the basic requirement of integrity in rule 1 of the Solicitors' Code of Conduct.’

For advice or an informal discussion on SRA law issues call 0844 2722322.

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