SRA: Restrictions mean low risk of repetition
A solicitor who held all the compliance roles at an alternative business structure (ABS) owned by a non-lawyer has been rebuked for multiple failures under his watch.
The Solicitors Regulation Authority (SRA) said Chukwuemeka Mmegwa was “unsuitable for a managerial, supervisory or compliance role” and so it also put conditions on his future practice to ensure he does not hold such a role.
A regulatory settlement agreement published yesterday said Mr Mmegwa, who qualified in 2017, worked at Virgo Consultancy Services from 1 July 2014 to 31 March 2023. Connected to talent agency Virgo People, the ABS provided visa and other services for performers, entertainers and sportspeople.
It was owned by ‘Mrs A’ but Mr Mmegwa was a director from May 2019. The firm was based in Barry in Wales, where Mrs A worked, and in London, where Mr Mmegwa was based until the office ceased trading on 31 March 2023 and he left.
The SRA shut down the law firm in December 2023, in part because of Mr Mmegwa’s failures.
He had been head of legal practice, head of finance and administration, anti-money laundering officer, authorised to supervise, the designated complaints handler, training principal, organisation contact, and authorised signatory.
In November 2021, Mrs A reported to the SRA a solicitor and former employee who it was believed had misled clients and colleagues about the progress of cases. The SRA received 10 other reports about this individual.
This led the regulator to conduct a forensic investigation of the firm, which found a large number of accounts rules breaches.
The agreement recorded how, over several months, Mr Mmegwa failed to provide the SRA with the information it needed to conclude that the firm’s books were in order.
As a result, the forensic investigation officer (FIO) was “unable to calculate whether the firm held sufficient funds in client account to match its liabilities to clients”.
“Direct discussions took place between the FIO and Mr Mmegwa on 6 May 2022 (by telephone) and on 4 July 2022 (in person) when Mr Mmegwa was reminded of his responsibilities and the seriousness of the situation.
“Despite this, Mr Mmegwa failed to provide clear answers to questions, gave conflicting accounts about how the firm dealt with reconciliations and failed to provide the information required.
“When asked to explain why he could not produce the documents requested in a timely manner Mr Mmegwa failed to provide a satisfactory explanation.”
On occasion, the SRA said, Mr Mmegwa “sought to deflect responsibility for the management of the firm’s accounts onto others”.
In total, the FIO made 12 requests for the firm to provide documentation and then had to issue a statutory production notice. The information was still not forthcoming.
In addition, he also failed to submit to the SRA within the time allowed qualified accountant’s reports, which detailed “significant breaches” of the accounts rules as well as client account shortages.
Separately, Mr Mmegwa did not deal with four client complaints – in two of them, the Legal Ombudsman criticised the firm for not handling the complaint properly.
The solicitor admitted to multiple rule breaches and that his conduct was “reckless as to the risk of harm and his regulatory obligations”.
The SRA said it took into account his mitigation, including that the firm was “under pressure due to the conduct of his former colleague”.
Further, he had to deal with “the impact of reduced staffing levels and limited resources”, while his ability to respond to client complaints was impacted by the actions of his former colleague and the impact of the pandemic.
Also, others held a level of responsibility for these matters, particularly Mrs A.
The SRA said a written rebuke was appropriate, noting that the conduct did not relate to his work as a solicitor outside of managerial responsibilities, and did not go to his honesty or integrity.
“Mr Mmegwa was not the only individual at the firm who was responsible for compliance but he did have key responsibilities as HOLP and HOFA,” it added.
Mr Mmegwa’s current role does not include managerial or supervisory responsibilities and “the added control, alongside a rebuke, of imposing conditions on his practising certificate – which mean he cannot be a sole practitioner, partner or compliance officer – would “ensure that there is a low risk of repetition”.
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