Paul Ronan was excluded from the Institute of Chartered Accountants in England and Wales (ICAEW) and ordered to pick up costs of £9,375 for breaching client money regulations after he had been disciplined three previous occasions for similar offences.
According to June’s ICAEW disciplinary orders, Paul Ronan could only blame his “stupidity” for putting client money at risk by paying it into an overdrawn account when pressed during a professional conduct department (PCD) investigation.
The practice owner agreed in November 2016 for another local accountant to transfer £5,000 to his client bank account on a temporary basis. By holding money not belonging to a client of the firm in the client account Ronan had breached ICAEW’s client money regulations.
Then in August 2018 Ronan transferred a total of £5,000 from his firm’s client account into the firm’s business account without the knowledge of his clients, the client from the local firm or the firm. He said this was done to prevent the business account going overdrawn.
He repaid the money with interest of £125 days later, but this sparked another complaint against Ronan as transferring money without the clients’ knowledge breaks the code of ethics rules.
Ronan admitted at the start of a quality assurance visit that he had borrowed the money for 10 days to cover a shortfall caused by his bank cancelling the office account overdraft facility during the recession.
He had cashed in his pension in June 2018 but due to delays, he didn’t receive the sum until 3 August 2018. Up until that point, he had financed the practice working capital from short-term loans.
The tribunal decision
The accountant had cooperated with the investigation and self-reported to the QAD, but what went against him was the fact that this wasn’t the first client money breach on the accountant’s disciplinary record.
There had been three other occasions where the accountant faced the disciplinary committee over breaches over a 16-year period.
His first disciplinary was in January 2014, where he was severely reprimanded and fined £3,000 after he transferred between November 2005 and May 2013 a total of £85,000 from his client account to his office bank account.
He was back in front of the disciplinary committee in November 2017 when he was pulled up again for client money breaches. He was severely reprimanded again and fined £5,000. It was a similar case, where he withdrew money from the client account without agreeing the amount with clients.
The final disciplinary recorded against Ronan came in May 2021 when he paid a practice assurance penalty of £4,500 for client money regulation breaches.
The tribunal concluded, “He has previously been reprimanded, severely reprimanded on two occasions, and fined. Yet he has clearly not learnt any lesson from those sanctions as he finds himself again being disciplined for breach of the Clients’ Money Regulations.”
Given Ronan’s history of client money regulation breaches, and with this disciplinary coming less than a year ago in May 2021, the tribunal explained that another reprimand or severe reprimand wouldn’t be appropriate and decided instead to exclude Ronan.
Due to Ronan’s financial circumstances, the tribunal has agreed for Ronan to pay the costs of £9,375 in 12 instalments of £782.25.
Sarah Price, an associate solicitor at Blake Morgan, said
“This is a clear example of inappropriate use of client money and an obvious breach of the Clients’ Money Regulations.
“Mr Ronan had fully accepted the allegations, which meant that a full hearing was not required. However, even where the facts are admitted, there is still an opportunity to put forward a plea in mitigation to the tribunal.
“Mr Ronan did not have representation at the hearing. In this case, the tribunal indicated that it took some mitigating factors in to consideration. However, it was clear that Mr Ronan’s previous disciplinary record played a major part in the tribunal’s decision making process.
“In circumstances where the facts are admitted, members should not disregard the option of seeking legal advice. Specialist legal advisers can provide advice and assistance regarding mitigation, with a view to achieving the best possible outcome.
Sarah Price is an associate solicitor and a member of the accountancy regulatory team at Blake Morgan. The team is available to assist with any disciplinary, regulatory and compliance matters arising in the accountancy profession – click here if you require any of their services.