Two partners at a law firm aligned with non-legal interests of one partner face fines for multiple rule breaches.
- The Solicitors Disciplinary Tribunal (SDT) highlighted serious misconduct involving client accounts used as banking facilities.
- Partners Ayub Bhailok and Robert Michael Fielding handled significant funds from Special Purpose Vehicles without billing.
- The firm’s operations primarily catered to property interests of Mr Bhailok and his family with minimal outside clients.
- A £12,000 fine was levied for systemic issues, with additional training mandated to address compliance failures.
The Solicitors Disciplinary Tribunal (SDT) has imposed fines on two partners, Ayub Bhailok and Robert Michael Fielding, from the Preston-based firm Bhailok Fielding. This action follows numerous rule breaches, including the misuse of client accounts as banking facilities. The tribunal noted that these breaches were in direct violation of the 2017 Money Laundering Regulations, labelling them “especially concerning.”
Mr Bhailok, who holds a significant share of 80% in the firm, utilised its services primarily to benefit his extensive property dealings. Each property was owned by a Special Purpose Vehicle (SPV), with Mr Bhailok being a director or beneficial owner. This setup mirrors his business involvement with his brothers, who manage their properties similarly.
Following a heart attack experienced by Mr Bhailok in 2016, the firm pivoted from being a general legal practice to one almost exclusively serving Mr Bhailok’s property entities. Despite this alteration in function, the firm remains authorised by the Solicitors Regulation Authority (SRA), conducting limited work outside this scope for pro bono causes and one relative in India.
In lieu of billing, Mr Bhailok arranged for SPVs to transfer money to the office account when necessary. This unorthodox financial practice facilitated by Mr Bhailok was significant in scope, with the SRA highlighting that approximately £17 million was manipulated within this context. The SDT underscored that these transactions were not justified by the provision of regulated legal services, thus breaching professional standards.
A notable case involved Greyfriars Assets Ltd, a holding company for profits generated by Mr Bhailok’s companies, used for transactions such as purchasing a £185,000 customised car number plate. The retained funds on client accounts extended well beyond necessary periods, being utilised as a “float” instead of for pending legal work. This misuse underscores a lack of compliance with money laundering risk assessments and standard controls.
The SDT approved a £12,000 fine against the individuals and the firm due to the systemic nature of the misconduct. An additional order mandates that the partners participate in training courses focusing on anti-money laundering and adherence to account rules within three months. The tribunal made clear that while the misconduct was highly serious, it did not breach fundamental tenets of the profession.
The tribunal’s decision underscores the importance of rigorous adherence to compliance regulations within legal practices.
