Michael Thomas Barry & Rachel Taylor

Findings — machine-extracted (anthropic-batch:claude-opus-4-8); verify against the decision

Michael Barry, sole principal and COLP/COFA of Mallory & Barry, failed to prevent his bookkeeper (Rachel Taylor) making improper transfers totalling over £486,000 from the client account between May 2017 and June 2018, failed to carry out compliant reconciliations, and failed in his COFA duties. He admitted all allegations including manifest incompetence; the allegation of recklessness for the later period was not proved because the Tribunal found he had genuinely (though foolishly and naively) accepted Taylor's assurances. No dishonesty was alleged or found against either respondent (the reporting accountant found no dishonesty by Taylor). Barry received an indefinite conditions/restriction order and was ordered to pay £10,700.70 costs. Taylor, the unadmitted bookkeeper, consented to and received a section 43 order and was ordered to pay £7,133.80 costs (costs apportioned 60/40).

Duties found breached:

• Accounting records, reconciliation and reports
• Firm governance, systems and compliance
• No conflict between current clients
• No improper use of client money
• Non-discriminatory acceptance and cab-rank
• Proper basis for allegations

Aggravating factors:

• The improper transfers were repeated and took place over a period of time
• The First Respondent ought reasonably to have known he was in material breach of his obligations
• Large sums of money improperly transferred out of the client account

Mitigating factors:

• The transfers were undertaken by the Second Respondent, latterly despite firm assurances they would not recur
• The client account shortfall was made good immediately/no actual loss to clients
• Previously unblemished career of almost 33 years
• Genuine insight and open, frank admissions
• Co-operation with the SRA investigation