“No room for complacency,” Solicitors Regulation Authority warns
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Two firms in the UK may have lost more than £7m to fraudsters, the Solicitors Regulation Authority (SRA) has revealed.
Backstopped by counterfeit credentials, fraudsters infiltrated the firms by offering to expand into different work areas, the Law Society Gazette said. The fraudsters then proceeded to access and steal client money at times when they were not supervised by the firms.
There is “no room for complacency,” said SRA chief executive Paul Philip. The fraudsters are particularly targeting smaller firms, he said.
Firms should conduct careful due diligence on potential employees or business partners, the SRA advised. Red flags to look out for include unusual proposals, like the potential employee or business partner offering to pay the sole principal or a certain partner a “salary” from the business they bring in.
The regulator said that offers, especially those that are unsolicited, should be treated with “extreme caution.” Firms should get as much verification of credentials as possible from third parties, such as banks and other professional firms, because references from other law firms may be untrustworthy because the fraudsters may have influence in the other firms.
Firms should also conduct thorough research through the internet, especially through official websites like those of the SRA and other regulators.
