Seven people have been arrested as part of an investigation by the UK’s Serious Fraud Office (SFO) into around £66m ($82m) of client money that went missing from collapsed law firm Axiom Ince.
Raids were conducted across nine sites early on Tuesday morning by the UK white-collar crime agency, which is tasked with investigating the most complex financial cases.
An SFO statement said more than 80 investigators from the agency, plus officers from London’s Metropolitan Police, arrived at locations in south-east England to bring the individuals in for questioning and search for potential evidence.
The individuals who have been arrested have not been identified, but it is known that the UK’s Solicitors Regulation Authority (SRA) this year barred three former Axiom Ince staff following the claims of misused client money.
Company director Pragnesh Modhwadia and senior lawyers Idnan Liaqat and Shyam Mistry were suspended from legal practice in the UK following an SRA investigation in September, which referred the case to the Metropolitan Police.
Trading of Axiom Ince’s shares stopped in London last month when around £66m in client money was found to be missing from its accounts. It has been alleged that this cash was used to fund acquisitions.
The SFO said investigators will examine how funds were passed from the firm’s client accounts with Barclays to the State Bank of India to fund purchases.
Nick Ephgrave QPM, director of the SFO, said in the statement: “There are a number of significant questions that need to be answered: clients from this law firm are missing many millions of pounds and more than 1,400 of its staff have lost their jobs. The impact on those affected is extremely serious.
Crucial Information
“This morning, we have used our specialist powers to obtain important information that will help us get to the bottom of what happened.”
Axiom Ince was founded in May, when law firm Axiom DWFM purchased corporate and commercial law firm Ince Group, which was set to enter the UK insolvency process of administration.
Two months later, Axiom Ince bought struggling insurance law firm Plexus LLP.
The UK’s SRA closed down Axiom Ince in October after claims came to light that client funds had been misused.
The Metropolitan Police referred the case to the SFO due to the complexity of the investigation. The two organisations are working closely together on the case.
