Seven former directors of Manchester-based conveyancing firm, LLP Wolstenholmes have been banned from being involved in the management of any law business, for up to 15 years.
The long-established practice (est. 1818) was forced to close in 2009, through intervention by the Solicitors Regulation Authority. All accounts and property transactions were immediately frozen, leaving many misled customers in negative equity, after having already transferred significant funds.
The Insolvency Service led the investigations and are in full support of the latest decision to disqualify the directors.
The SRA had found the firm to be fraudulent and failing to have adequate financial controls in place. They had also overlooked imperative accounting records and submitted false stamp duty land transfer returns on numerous occasions.
Within the first 4 years after the firm had closed, the Solicitors Compensation Fund have paid out in excess of £12.7 million in compensation claims, to around 2,500 of Wolstenholmes’ former clients. The HMRC however, proceeded to target the clients for missing stamp duty payments.
His Honour Judge Bird commented on how clients were led to trust the well-known practice, saying:
‘That trust was abused at great cost to members of the public and at great cost to the Solicitors Regulation Authority and to the Solicitors Compensation Fund. Fraud of the kind which was rife under their management in my judgment justifies a disqualification period of the maximum that the law allows, that is the period of 15 years.’
The case was presented to the Solicitors Disciplinary Tribunal in May 2013, where 2 of the directors were immediately removed from the roll of solicitors, and a further 2 suspended. Previous orders had also resulted in the members being prevented from providing law services in conjunction with any solicitors’ practice, without SRA permission being granted.
The final case in this investigation was adjourned, until the hearing scheduled for next month.