SDT: Solicitor should have been even more aware of the rules
A partner who ignored a warning letter from the Solicitors Regulation Authority (SRA) telling him not to use his client account as a banking facility, which he then did, has been fined £10,000.
The SRA said it became concerned about Charles Ayodemiji Ewan because of his firm’s involvement with a finance company run by a struck-off solicitor.
However, the Solicitors Disciplinary Tribunal (SDT) halved the costs claimed by the regulator to £19,500, in part because there was “nothing to indicate” how long the regulator’s investigation officer had spent at Ewan & Co.
The SDT heard that Mr Ewan, admitted in 1998, worked at the Ilford, Essex office of the three-partner law firm, where he was COLP and COFA. The other two partners worked from an office in north London. The firm has since ceased trading.
The tribunal said the SRA’s concerns about Mr Ewan arose due to the firm’s involvement with TN (UK) Consultancy Ltd (TNCL), a firm managed by a former solicitor who was struck off in 2017.
TNCL provided short-term loans and bridging finance to companies and individuals in property transactions.
The SRA launched an investigation in September 2018 and, having reviewed a selection of Mr Ewan’s files, found “a number of instances where it seemed that the firm’s client account was being used as a banking facility”.
Mr Ewan had received a letter from the SRA in July 2016 warning him against doing just this after he had retained money on client account in respect of a conveyancing transaction which fell through. He agreed to make various payments on the client’s behalf, including of her children’s school fees.
The tribunal said that, having received this advice, the solicitor should have been “even more alert and aware” of the rules.
However, the SRA set out the details of four matters where around £1.5m passed through the firm’s client account where there were no underlying legal transactions.
The solicitor admitted using, or allowing the use of, a client account in circumstances amounting to the provision of a banking facility.
There was a separate allegation involving Ewan & Co acting for a client in a property purchase and NatWest as lender. Mr Ewan admitted not informing the bank of a further loan the client took out to help finance the purchase, failing to protect his lender client’s interests as a result.
This was not Mr Ewan’s first appearance before the SDT – in 2020 he was fined £4,000 for failing to send accountants’ reports to the SRA in time, to keep proper accounting records and to carry out bank reconciliations.
The SDT said it could not identify “any particular motivation” for Mr Ewan’s actions this time, “as this appeared to be his normal way of working at the time, despite the previous warning he had received”.
There was no evidence of any actual harm and a fine of £10,000 was appropriate this time. The SDT decided against imposing any restrictions on Mr Ewan’s future practice, noting that the SRA had chosen not to so and that the end date of the misconduct was four years ago.
Mr Ewan was ordered to pay £19,500 in costs. On the SRA’s claim for £40,000, the SDT said there was “nothing to indicate” exactly how many days were spent by the investigation officer at the offices of Ewan & Co, and so it more than halved the £16,400 claimed for the forensic investigation costs made up around half of the bill.
The legal costs charged by Capsticks – the SRA’s external solicitors – for this “not particularly complex” case were reduced from £18,500 to £10,000 plus VAT.
According to Companies House, Naresh Kumar Chopra is a director of TNCL. He was struck off, for a second time, in 2017 after dishonestly misleading mortgage lenders in order to service clients of a firm which was barred from lenders’ panels.
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