Ince owns up to pensions gaffe as cyber attack wreaks £5m havoc
Ince has owned up to paying staff pension contributions into the wrong account, blaming a cyber attack earlier this year that also caused £5m in damages.
It comes after a tumultuous period, which has seen chief executive Adrian Biles stand down and the firm desperately try to raise nearly £11m to steady the ship.
In an internal email to staff, the firm said that payment ‘was made into an incorrect account, and needed to be refunded and resent and some payments, usually due on the 22nd of the following month, were delayed’.
To make up for the error, Ince vowed to pay ‘an additional 12.5% of your pension payment made in July’s payroll’ in August.
At the end of July, Ince revealed it needed to raise £8.6m or risk facing ‘financial difficulties’. It has since stated it is looking to raise around £11m through newly issued shares, a bank loan and a new open offer to qualifying shareholders.
In statements to the market, Ince blamed its struggles on the Covid restrictions in the UK and Asia, while investment in its Hong Kong office has ‘not led to similar cash returns’. The firm was also subject to a cyber attack on 13 March 2022 that predominantly targeted ‘non-client data and our own internal systems’. Recent market statements have estimated the cost of the attack to be around £5m.
The drama has coincided with chief executive Biles standing down from his position. Biles, who led legacy Gordon Dadds through its IPO before the firm merged with Ince & Co, is being replaced by Donald Brown. Brown was formerly chief executive of Arden, the investment banking company purchased by Ince for £10m earlier this year.
Former solicitor jailed for litigation funder fraud
A former lawyer has been prosecuted for stealing nearly £20m of investors’ money from collapsed litigation funder Axiom Legal Financing.
Timothy Schools, a police officer turned solicitor who ran Preston-based ATM Solicitors, was sentenced to 14 years in prison for the fraud. He is said to have funnelled funds into three law firms that he either owned or held an undisclosed interest in while an investment manager at the fund, pocketing £19.6m. The Serious Fraud Office (SFO) reported that he spent the cash, intended for access to justice in no-win-no-fee disputes, on shares in a ski hotel in France, a boat, luxury cars and a £5m fishing and shooting estate in the Lake District.
The Cayman Islands-registered fund collapsed in October 2012 after the fraud allegations surfaced.
As the growing litigation funding market remains self-regulated, this acts as a reminder to firms and investors to do their research. Said Richard Viegas, litigation partner and head of litigation funding at Taylor Wessing: ‘The collapse of Axiom Legal Financing illustrates that despite the paradigm shift of litigation funding as a key tool in pursuing high-value litigation, clients benefit from exercising considerable caution in choosing a funder for their claims. There are several notable funders with extremely impressive and long track records that we work with, but the market has become increasingly congested with newer players, for whom this is not perhaps the case.’
While the SFO’s prosecution might bring comfort to some, critics were quick to point out the shortcomings of the watchdog, which brought three prosecutions in total relating to the fund including against fellow former solicitor Richard Emmett and former independent financial adviser David Kennedy.
As one senior white-collar crime partner said: ‘Watch this space because they are claiming a victory in the Axiom case but there was one acquittal, one hung jury and one conviction – that looks to me like a one-in-three success rate.’
‘Burn it’– ex-Jones Day partner admits destroying documents
Former Jones Day partner Raymond McKeeve was found in contempt of court after ordering the destruction of a client’s messaging app to dodge a search order.
The saga relates to a 2019 claim brought by Ocado against Project Today Holdings, a company set up by Ocado co-founder Jonathan Faiman, and an Ocado employee that the supermarket alleged had been passing on confidential information. The private equity partner had been advising Project Today in negotiations with competitor supermarkets when Ocado obtained a search order against McKeeve’s client. After learning of the order, he is said to have told Project Today’s IT manager to ‘burn it’ or ‘burn all’, referring to the client’s messaging app 3CX.
McKeeve claimed to have ‘panicked’ to protect his wife, Belinda de Lucy, who was a Brexit MEP at the time and whose name he was using as a pseudonym for his client on the app.
Mr Justice Adam Johnson recognised McKeeve’s ‘entirely genuine’ regret, describing him as ‘an intelligent and driven individual’ before deeming him ‘guilty of a serious error of judgement.’ The issue of costs and sanctions has been adjourned to a hearing on 4 October.