Tribunal finds solicitor acted despite “obvious” conflict in LCF-linked trustee role
A solicitor linked to the collapsed London Capital & Finance PLC mini-bond scandal has been fined £30,000 after a disciplinary tribunal found he acted in an “obvious” conflict of interest while serving as a security trustee for bondholders.
The Solicitors Disciplinary Tribunal ruled that solicitor Alexander William Bruce Lee breached professional conduct rules by acting simultaneously for London Capital & Finance (LCF) and as director and security trustee of Global Security Trustees Limited (GST), the entity responsible for protecting bondholders’ interests.
The tribunal found that Lee held the GST role between March 2018 and April 2019 while continuing to advise LCF on lending transactions funded by bondholder money. During that period, LCF raised around £100 million from investors before the company collapsed into administration in 2019.
LCF had raised £237 million from more than 11,000 retail investors through the sale of mini-bonds between 2013 and 2018. A High Court judgment later described the company’s business as fraudulent trading and “in effect a Ponzi scheme”. Lee was not accused of fraud or dishonesty in the proceedings.
The tribunal concluded that Lee placed himself in a position where his fiduciary duties to bondholders conflicted with his obligations to LCF as a solicitor. It found that he should never have accepted the trustee role given his existing relationship with LCF and its chief executive, Andy Thomson. In its judgment, the tribunal said Lee accepted the appointment “almost as a favour” to Thomson and continued acting despite what it described as “obvious and irreconcilable conflict”.
The panel rejected arguments that the trustee role was largely passive. It found that Lee’s position required him to independently safeguard bondholder interests and potentially act against LCF if concerns arose over secured assets or enforcement action.
The tribunal also noted that concerns regarding security assets and regulatory intervention later intensified the conflict risks. It stated that continuing in both roles damaged public confidence in the legal profession. Although the tribunal accepted that Lee did not knowingly participate in the underlying fraud, it ruled that his conduct lacked integrity and breached professional principles governing solicitors. Alongside the £30,000 fine, Lee was ordered to pay £50,000 in legal costs.
The tribunal acknowledged that Lee had cooperated with the investigation, shown insight into his failings and had no previous disciplinary history. However, it concluded that the seriousness of the misconduct required a substantial financial penalty to maintain public confidence in the profession.