A disciplinary tribunal has heard how a property centre and financial services venture by Tamworth firm Rutherfords failed with substantial losses.
Five partners in the firm were fined a total of £9,000 for failing to provide clients with adequate financial protection.
The London tribunal heard how Rutherfords had opened the property shop under the management of a chartered surveyor in a bid to beat off conveyancing competition from Birmingham solicitors.
But following November and December 1993 Law Society monitoring report visits, the office closed and all partners suffered “substantial losses”.
Roger Field, representing the partners, said that after setting up the property centre “it was a natural progression to set up a financial services department”.
Robert Whitehead, who ran the department, “did his best” but his “background in general conveyancing did not fit with the responsibilities he was asked to take”, Field said.
“He is an honourable man who has served his profession well for 30 years,” he added.
Whitehead was fined £5,000 after admitting 10 breaches of the Solicitors Practice and Solicitors Investment and Business Rules, including failing to explain investment risks to clients, failing to disclose the firm's commission to clients and failing to keep and maintain records. Peter Cadman, for the Law Society, put the case against Whitehead as one of conduct unbefitting a solicitor.
Robert Whitehead's partners Barry Whitehead, Paul Buckingham, Peter Wiseman, and Jan Jellema, admitted seven charges as breaches of the rules, but not as conduct unbefitting a solicitor. They were each fined £1,000.
Tribunal chair Barrie Marsh, sitting with Adrian Gaynor-Smith and Michael Baughan, said: “This tribunal regards breaches of the rules as matters of the utmost seriousness.”
The five partners were ordered to share costs of £1,750.