SFO Investigates £120 Million Legal Fund Collapse

Collapsed investment fund Axiom Legal Financing is facing an investigation by fraud detectives.

The £120 million fund promised investors 11% a year returns on their cash but failed to deliver and was suspended in 2012 after investors tried to withdraw their money.

The run on the fund’s cash was prompted by allegations about founder Tim Schools.

The Serious Fraud Office in London has confirmed an inquiry is under way.

“We are looking at several matters following information received about the fund,” said a spokesman.

Fund managers told investors the fund offered short-term finance to no win, no fee legal firms in Britain.

Receivers Grant Thornton revealed almost two-thirds of the cash was lent to just two legal firms.

“Both are now insolvent and owe Axiom cash that runs into tens of millions,” said a spokesman for the receivers.

Schools is a director of one of the firms.

The Solicitors Disciplinary Tribunal has struck off Schools for ‘serious and continued’ misconduct in relation to his dealings with the firm.  Schools is appealing the ruling.

Meanwhile British expat Liz Turner, 67, is marshalling a legal challenge to reclaim cash lost in the Axiom collapse.

Turner, who lives in Spain, is trying to track down an estimated 2,000 other Axiom investors to find enough to group together to finance a class action in court.

She needs 150 investors to trigger court proceedings, but so far has found only 60, all who live in Northern Spain.

Doubly unlucky

“There must be others in the south of Spain who lost money to Axiom,” she said. “We need to know who they are and if they are willing to contribute to the fighting fund because everyone seems to have lost too much cash to finance court action on their own.”

Ms Turner is doubly unlucky as she also lost money in the ill-fated LM Investment Fund. LM also collapsed owing investors millions.

“Altogether I have lost around £88,000 to both these schemes,” said Ms Turner.

“Taking these people to court will cost us a massive amount of money. We need to group together and support each other financially and realise we have the moral high ground here.

“It’s hard work and takes a lot of time to track down investors. About 14,000 people are involved with these companies and they are scattered all over the globe.”

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