Accounts: Solicitor failed to obtain accountant’s reports for five years
A solicitor who allowed made improper transfers from client account to his firm’s office account has been fined £9,000 by the Solicitors Regulation Authority (SRA).
David John Goldsmith replaced the money – but only after the shortages were brought to his attention.
Mr Goldsmith, who qualified in 1990, has been operating as a sole practitioner since 2009 at D Goldsmith & Co in Marlborough, Wiltshire.
According to an SRA notice published yesterday, he allowed a cash shortage on client account to arise from April 2019, which had reached more than £22,000 by February 2021; the money was improperly moved to office account through multiple transfers.
Further, he failed to obtain accountant’s reports for the firm for the years ended 30 September 2016 to 30 September 2020.
The SRA said a fine was appropriate because his conduct had “the potential to cause significant harm” – there was no evidence that clients actually lost money. The shortage was replaced “but existed for a long period of time”, as did the failure to obtain accountant’s reports.
In both cases, the breaches were only remedied when the SRA identified them during a forensic investigation of the firm.
The notice said: “His conduct was serious and any lesser sanction, such as a rebuke, would not be appropriate to protect the public interest. Any lesser sanction would not provide a credible deterrent to him and others.”
The SRA’s fining guidance put the misconduct with the penalty bracket of between £5,000 and £25,000 and the regulator decided it should fall at the lower end.
What would have been a £10,000 was discounted by 10% given that Mr Goldsmith admitted the misconduct and replaced the shortage.
He was also ordered to pay costs of £1,350.
This is the type of case that would once have gone to the Solicitors Disciplinary Tribunal but is now dealt with internally by the SRA under its extended powers to fine solicitors up to £25,000, instead of the previous figure of £2,000.
