A solicitor involved in a land banking scheme which cost investors their life savings has been struck off by the Solicitors Disciplinary Tribunal (SDT).
Stephen Murrell was a director of Hamilton Bentley, a business that offered investors returns of up to 120 per cent per year from buying tiny strips of green belt land. Murrell's law firm, the Staple Inn Partnership of London, which featured in promotional brochures, promised to safeguard the cash until the money was invested.
However, the cash was paid into an account used by directors of Hamilton Bentley for their own salaries, office expenses and the office credit cards. The SDT heard that customers lost fortunes as the directors raked in huge profits.
The SDT found that Murrell had failed to disclose an interest, breached an undertaking to a client, wrongfully acted in a collective investment scheme and breached the accounts rules. Murrell did not attend the hearing but the allegations against him were found to be proven.
Murrell was struck off the roll of solicitors and ordered to pay costs of £42,180.95.
This case illustrates the potentially serious consequences for solicitors who are found to be involved in improper land banking schemes. The Law Society issued guidance to warn firms of the increased prevalence of land banking schemes in October 2010. The guidance recommends some practical steps that solicitors can take to mitigate the risk of becoming involved in improper schemes.
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Read our alert on land banking schemes