A solicitor can be ordered by the court to repay sums of money to investors who innocently paid money to the solicitors client who was carrying out unlawful financial transactions with which the solicitor was concerned. One of the purposes of introducing powers to make a restitution order against someone who was ‘knowingly concerned’ in unlawful investment activity was to prevent directors from hiding behind the corporate veil of the infringing company. In particular: ‘If as is often the case, the company is not worth powder and shot, it is obviously just to enable the court, as part of the statutory remedy of quasi-rescission, to order the individual who is running that company in an unlawful manner to recoup those who have paid money to the company under an unlawful transaction.’
Browne- Wilkinson VC stated of ‘knowingly concerned’: ‘The most obvious example of a person ‘knowingly concerned’ in a contravention will be a person who is the moving light behind a company which is carrying on investment business in an unlawful manner. Professor Gower in his report, which was the basis on which the Act was introduced, specifically pointed out the mischief of directors hiding behind the corporate veil of companies… If, as is often the case, the company is not worth powder and shot, it is obviously just to enable the Court, as part of the statutory remedy of quasi-rescission, to order the individual who is running that company in an unlawful manner to recoup those who have paid money to the company under an unlawful transaction.’
Sir Nicholas Browne-Wilkinson VC
Financial Times 9 August 1991
England and Wales
Cited by:
Appeal from – Securities and Investments Board v Pantell and Others (No 2) CA 24-Jun-1992
Order against solicitors in defence of Financial Services proceedings were to stand. The powers conferred by s.6(2) and 61(1) were wide and should not be cut down judicially, and the two remedies might overlap. The power found in s.61(1) had two . .
Lists of cited by and citing cases may be incomplete.
Updated: 07 September 2021; Ref: scu.653243
