Solicitor and firm fined for using client account in private car deal and AML documentation lapses.
A solicitor and his law firm have been hit with fines totalling £10,000 after a regulatory tribunal found that a client account was used as a private banking facility, including the processing of a car payment worth nearly £200,000.
Feisal Mohammed Raza Sheikh, a consultant solicitor at Maxim Solicitors Limited, admitted to breaching SRA rules when he allowed a client’s company to transfer funds through the firm’s account to settle finance on a personal luxury vehicle he was selling. The Solicitors Disciplinary Tribunal (SDT) found that the transactions lacked any legal justification and breached rules expressly prohibiting the use of client accounts as de facto bank accounts.
Between 2017 and 2020, Sheikh facilitated several payments between the client, her company, and a finance firm to clear outstanding debts on a high-performance car, despite the law firm not being instructed to act in the sale. In doing so, the firm’s client account was improperly used to handle over £190,000 in car-related funds.
Embed from Getty ImagesThe SDT concluded that while there was no dishonesty or criminal intent, the misuse of client accounts for non-legal transactions posed significant risks to public trust in the profession and violated Principle 2 of the SRA Principles 2019.
The tribunal stated the client’s requests to use the firm’s client account “for convenience” should have been refused, and that Sheikh, as an experienced solicitor, “should have known” such transactions were improper. Although the client cited childcare, COVID isolation, and banking limitations as reasons for her inability to complete the payment herself, the tribunal deemed Sheikh’s agreement to process the transaction through the firm as a clear breach.
Further failures were identified within Maxim Solicitors itself. The firm admitted to not documenting client and matter risk assessments in at least five separate cases between 2017 and 2020, breaching multiple anti-money laundering regulations. The tribunal found that while written policies existed, there was no consistent process to record risks, as required by law.
The tribunal stressed that these breaches were basic yet fundamental, particularly given the heightened regulatory attention on anti-money laundering compliance within the legal profession. Though no actual harm was caused, the potential for abuse or inadvertent facilitation of crime was considered significant enough to warrant a financial penalty.
Sheikh and Maxim Solicitors were both fined £5,000 each, placing their conduct at the lowest level of seriousness warranting a sanction, according to the SDT’s guidance. Costs of £2,500 and £3,000 respectively were also ordered against them.
In mitigation, Sheikh cited the pressures of working during the pandemic, the absence of any prior disciplinary record, and full cooperation with investigators. Similarly, the firm highlighted that it has since introduced new systems to document risk assessments and had acted transparently throughout the process.
The SDT accepted that the matter could be resolved by way of an Agreed Outcome, allowing both parties to avoid a contested hearing. However, the tribunal issued a clear reminder: client accounts must never be used for non-legal transfers, no matter the circumstances or intentions.
