A City of London law firm principal has been fined £17,000 for advising clients to invest in a high-risk and ultimately unsuccessful property scheme. Ming Fai Tam, also known as Matthew Tam, was found by the Solicitors Regulation Authority (SRA) to have charged clients around £1,300 for each property investment consultation while failing to provide adequate supervision for staff responsible for handling these transactions.

Between 2017 and 2020, Tam's firm, Batchford Solicitors (later MFT Solicitors), facilitated the purchase of approximately 312 properties, mainly by overseas buyers. These investments involved properties sold by a special purpose vehicle with no trading accounts, requiring initial deposits ranging from 30% to 100% of the purchase price. The scheme promised buyers—primarily from the Far East—returns from converting properties into flats, student accommodation, or hotel rooms with guaranteed income. However, the developments underperformed, no promised returns were paid, and the buy-back provisions were ineffective because they depended on the seller’s solvency. Additionally, rental agreements were often unenforceable.

The SRA’s forensic investigation of 14 client files across six developments revealed multiple failings in the advice given. Tam admitted that he did not adequately warn clients about the risks inherent in off-plan buyer-led investment schemes, nor did he ensure that clients fully comprehended these risks. Furthermore, he acknowledged his failure to provide proper training and supervision to his staff, which contributed to the inadequate client advice.

Despite prior warnings issued to Tam in 2016 and 2017 concerning the risks of such schemes, he continued to accept and advise on these transactions. The SRA deemed his conduct a breach of regulatory standards, highlighting that clients suffered financial losses due to the lack of proper guidance. The regulator emphasised that issuing a fine serves to maintain public confidence in the solicitor profession and sends a clear message that such failings will not be tolerated.

In his defence, Tam, now employed by Chan Neill Solicitors in the City, stated that he currently undertakes ongoing training, stays updated on legal developments, and has his new firm’s partners review his files. He also asserted that he no longer accepts work involving sales of fractional property units like hotel rooms or office spaces and restricts new build transactions to those with deposit protections capped at 10%.

This case echoes broader concerns within the legal profession regarding conflicts of interest and inadequate client safeguards in property transactions. Separate disciplinary actions have underscored the importance of transparency, with another law firm owner suspended for failing to disclose interests in a property investment that later collapsed. Moreover, other solicitors have faced sanctions for poor property conveyancing advice, inadequate anti-money laundering controls, and dishonesty in high-value property deals—each underlining the ongoing need for rigorous professional standards.

The SRA’s firm stance in fining Tam and others reflects its commitment to protecting clients and maintaining the integrity of legal advice offered in complex and risky property investments.

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Source: Noah Wire Services