A formal investigation into the suspended £100m Axiom Legal Financing Fund could be launched by the Serious Fraud Office, which has told FTAdviser it is “in receipt of information” and is “making enquiries”.
The news comes in the aftermath of a decision by the Solicitors Regulation Authority to strike off the fund’s former director, Tim Schools, for ‘serious’ and ‘deliberate’ misconduct in relation to ATM Solicitors, a firm he owned and sold in 2011.
There is no suggestion of a link between the failings identified at ATM and Mr Schools’ role on the Axiom fund.
In January, FTAdviser revealed that the receivers of the troubled fund had brought claims against a number of parties in London’s High Court, which are “considered to have acted fraudulently” in relation to “sums up to £110m”.
The three receivers at Grant Thornton said in January that the High Court claims included “unlawful means of conspiracy, breach of fiduciary duty, dishonest assistance, unconscionable receipt and procuring breach of contract for sums up to £110m”.
Worldwide freezing orders were also obtained against a number of the defendants, preventing them from dealing, disposing or realising substantial assets, the receivers said.
An SFO spokesperson told FTAdviser today (1 September): “We are in receipt of information and making enquiries but we cannot comment on whether we have launched an investigation.”
Axiom Legal Financing Fund lent money to ‘no win, no fee’ lawyers and was marketed to UK investors and advisers.
The fund was suspended in October 2012, following the resignation of Mr Schools, who was a director of Cayman Islands-based investment manager Tangerine Investment Management.
Tangerine was sacked from its role in November 2012 following the suspension of trading in the fund’s shares.
In February 2013, Grant Thornton was appointed receiver of the £100m fund. In June 2013, the UK-based distributor of Axiom was placed into liquidation and Sheffield-based P&A Partnership was appointed as liquidator.
Separately, Mr Schools has been under investigation by the UK Solicitors Regulation Authority in relation to alleged misconduct at ATM Solicitors, an English law firm he sold in 2011.
He faced a number of allegations including that he acted where there was a conflict of interest, failed to act with integrity, acted recklessly and failed to maintain proper books of accounts and financial records.
The Solicitors Disciplinary Tribunal found that Mr Schools had been motivated by “financial gain and that the misconduct had arisen from the way he had operated the firm”, in particular he had “allowed himself to be controlled and influenced by others”.
It added: “The seriousness of the misconduct was aggravated by the fact that the respondent’s actions were quite deliberate and had continued for a period of time.
Mr Schools “was ordered to pay costs to be assessed if not agreed, and to make an interim payment of £60,000 to the applicant towards those costs.”
Grant Thornton did not respond to FTAdviser enquiries.
