Jones Day brings £25m fraud action against Fladgate on behalf of Izodia

Jones Day has launched a £25m claim against Fladgate Fielder on behalf of collapsed dotcom company Izodia.

Izodia director Gerald Smith pleaded guilty to defrauding the company of £36m in 2006 after theft and false accounting charges were brought against him by the Serious Fraud Office.

Fladgate, as well as its company secretarial services business Walgate, is alleged to ;have ;breached ;its ­fiduciary duties as it acted for both Izodia and Smith.

The firm is alleged to have failed to disclose fraudulent misconduct by Smith to ­Izodia; attempted to cover up the fraud; resisted the appointment of independent solicitors to investigate the fraud; and deliberately misled an independent adviser appointed to Izodia.

In 2006 a Jersey court ordered Royal Bank of Scotland International to repay £25m into Izodia’s accounts because its bank accounts were the conduit for the fraud. The court also questioned the actions of former Fladgate partner Nicholas Greenstone, who acted for both Smith and Izodia.

“How Mr Greenstone managed to certify as true a meeting which had never taken place… is hard to understand,” said the judge.

Fladgate ;this ;week declined to comment.