LONDON, Aug 10 (Reuters) – An investment manager of a collapsed 100-million-pound ($121 million) Cayman Islands-based legal financing fund was on Wednesday convicted by a London jury of fraudulent trading, fraud by abuse of position and money laundering.

Timothy Schools, a 61-year-old former lawyer who founded Axiom Legal Financing Fund in 2009 to provide loans to law firms pursuing no-win-no fee lawsuits, siphoned off nearly 20 million pounds of investor money to buy luxury properties and cars, the UK Serious Fraud Office (SFO) said in a statement.

His lawyer, David Hanman of Cobleys Solicitors, said he would not be commenting ahead of his sentencing on Thursday.

The jury at London’s Southwark Crown Court failed to reach a verdict for a second defendant, former independent financial adviser David Kennedy. The SFO has 21 days to decide whether to call a retrial. His lawyer was not immediately available for comment.

A third co-defendant, former lawyer Richard Emmett, was acquitted.

“It’s unbelievably horrible to have your reputation called into question,” Emmett said in a statement. “I now wish to get on with my life and career, which this unfounded prosecution by the SFO has placed on pause.”

The Axiom fund was an unregulated collective investment scheme that secured more than 100 million pounds from around 500 investors, who were told a panel of quality law firms would use their funds to back legal cases with a high chance of success.

But tens of millions of pounds were paid to three law firms that Schools either owned or held an interest in, the SFO said.

He diverted more than 19.6 million pounds ($23.76 million) into offshore bank accounts, buying shares in a ski hotel in France and a 5-million-pound fishing and shooting estate in Britain, it said in the statement.

The lawsuits funded by Axiom, meanwhile, were often lost at court and insurance policies failed to cover losses.

Schools covered up the failures by arranging for the repayments of old loans with new Axiom loans, the SFO said.

($1 = 0.8249 pounds)

Reporting by Kirstin Ridley; Editing by Emelia Sithole-Matarise

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