An experienced solicitor who agreed to act as a security trustee as an ‘almost favour’ for his client was in ‘obvious’ conflict with his solicitor role for the lender, the collapsed investment scheme London Capital & Finance, the Solicitors Disciplinary Tribunal has found. Alexander William Bruce Lee, who qualified in New Zealand in 1984 before his admission in England and Wales in 1991, was fined £30,000 for causing harm to the reputation of the profession.
Lee was director and owner of 50% of the shares of Global Security Trustees Limited (GST), in which he was acting as security trustee protecting the interests of bondholders ‘notwithstanding an obvious conflict in doing so (or significant risk thereof)’ given his previous and subsequent instructions for LCF. He was alleged to have breached principles 2 and 6 of the SRA Principles 2011 and breached outcome 3.4 of the Code of Conduct 2011.
Lee denied the allegation. It was found proved in its entirety by the SDT.
LCF, the SDT judgment noted, raised £237m from retail investors by selling mini bonds. LCF advanced the money raised to connected companies associated with four individuals, one of who was LCF chief executive Andy Thomson, whom Lee took instructions from when acting for LCF. Lee ‘was aware at the material times that [Thomson] has some form of “residual interest” in the borrowers. That position…was not disclosed to bondholders’
LCF’s business was later found to amount to ‘fraudulent trading and was in effect a Ponzi scheme’. It closed following a Financial Conduct Authority raid in 2018. There was ‘no suggestion’ Lee was involved in the fraud, the judgment said, adding he was ‘caught up in the fraud like other parties’.
