.jpg){kind=link}
Jailed financial adviser David Kennedy ordered to repay victims after axiom fund collapse
A former financial adviser convicted of fraudulent trading linked to a failed legal finance scheme has been ordered to repay more than nine hundred thousand pounds, following enforcement action by the Serious Fraud Office (SFO).
His Honour Judge Perrins, sitting at Southwark Crown Court, imposed a confiscation order of £928,479.89 against David Kennedy. The court ruled that the recovered funds will be returned to victims of the fraud, which centred on the now-defunct Axiom Legal Finance Fund.
Kennedy is currently serving an eight-year prison sentence for his role in the scheme, which he operated alongside his business partner, former solicitor Timothy Schools. He was convicted last year after a trial examining the operation of the Cayman Islands-registered Axiom Legal Finance Fund, which ran for more than two years.
Embed from Getty Images
The fund promoted a no-win, no-fee litigation finance model, using investor money to back thousands of legal cases. However, the cases were high-risk, often inadequately vetted and frequently unsuccessful in court. When the scheme collapsed, investors suffered losses exceeding one hundred million pounds.
The court heard that Kennedy personally benefited significantly from the operation of the fund. He was found to have diverted more than five million eight hundred thousand pounds from Axiom to finance a lavish lifestyle. This included the purchase of a villa in Tenerife, properties in Hull, savings held in a Spanish bank account, pension contributions and several luxury vehicles.
Under the terms of the confiscation order, Kennedy has three months to pay the sum in full. Failure to do so could result in an additional prison term of up to six and a half years, to be served consecutively to his existing sentence.
The order follows a wider recovery effort by the SFO linked to the Axiom Fund investigation. Earlier this year, the agency secured its first successful unexplained wealth order in the case, targeting a property owned by the former wife of Timothy Schools. That High Court order led to the sale of a Lake District property, generating £1.1 million, which was recovered in September.
Paul Napper, head of proceeds of crime at the SFO, said the confiscation order marked an important step in addressing the harm caused by the scheme. He said Kennedy had funded a lavish lifestyle using investors’ life savings, with many victims losing everything when the fund failed.
The SFO said it remains committed to pursuing confiscation and asset recovery in complex fraud cases to ensure that offenders are stripped of criminal gains wherever possible.