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SFO opens criminal investigation into Axiom Ince

A criminal investigation has been launched into Axiom Ince, the Serious Fraud Office (SFO) announced today (14 November). Seven individuals have been arrested in connection with the investigation and searches have been carried out across nine sites.

More than 80 SFO investigators, alongside Metropolitan Police officers, went to locations across the southeast of England early this morning to search for potential evidence and bring in individuals for questioning.

‘There are a number of significant questions that need to be answered: clients from this law firm are missing many millions of pounds and more than 1,400 of its staff have lost their jobs. The impact on those affected is extremely serious,’ Nick Ephgrave QPM, director of the Serious Fraud Office, said.

‘This morning, we have used our specialist powers to obtain important information that will help us get to the bottom of what happened,’ he added.

The Solicitors Regulation Authority (SRA) intervened in the firm on 3 October, closing it with immediate effect to protect the interests of clients and former clients of the firm.

Axiom Ince rescued Ince & Co after its second pre-pack administration in April and bought Plexus Legal in July. However, the situation quickly deteriorated with the SRA intervening into the practices of managing partner Pragnesh Modhwadia, for suspected dishonesty, and partners Idnan Liaqat and Shyam Mistry in August.

The firm filed a claim for alleged breach of fiduciary duty against Modhwadia with a High Court judge imposing a freezing order of £64m against him, after he admitted client money had been used to buy both Ince and Plexus, alongside several properties. Modhwadia was unable to account for the money.

SFO investigators are also set to examine how funds passed from Axiom Ince client accounts with Barclays to the State Bank of India to fund these purchases.

At the time of the SRA’s intervention, Axiom Ince employed over 1,400 staff and operated in 14 branches across England and Wales.

The Metropolitan Police referred the case to the SFO due to the complexity of the alleged fraud. Both organisations will continue to work on the investigation.