Financial adviser ordered to repay £928,000 after Axiom Fund fraud

A former financial adviser convicted of running a £100 million investment fraud has been ordered to pay more than £900,000 in a confiscation order granted by Southwark Crown Court. David Kennedy, who managed the Cayman-registered Axiom Legal Finance Fund, must repay £928,479.89 within three months or face an additional six and a half years on top of his current eight-year prison sentence.

Background and Context

The Axiom Legal Finance Fund operated a no-win, no-fee investment scheme that promised returns from funding high-risk court cases. According to court documents, Kennedy and his business partner Timothy Schools managed the fund for over two years without properly vetting the cases, resulting in the loss of more than £100 million of investors' money. The fund's collapse devastated many investors who lost their life savings in what investigators described as a fundamentally flawed business model.

Key Figures and Entities

David Kennedy, a former financial adviser, was convicted last year for his role in managing the fraudulent scheme. Court records show he personally benefited from more than £5.8 million diverted from the Axiom fund, using the money to purchase a villa in Tenerife, properties in Hull, maintain a Spanish bank account, fund a pension scheme, and acquire several luxury vehicles. His co-conspirator Timothy Schools, a former solicitor, was also convicted in connection with the fraud. The Serious Fraud Office (SFO) has successfully secured assets from both men, including a £1.1 million property owned by Schools' ex-wife through the agency's first successful unexplained wealth order application.

Legal and Financial Mechanisms

The confiscation order against Kennedy represents part of the SFO's broader strategy to recover proceeds of crime from financial fraudsters. The order, granted by His Honour Judge Perrins, requires Kennedy to repay nearly £1 million that will be returned to victims of his fraud. This follows the SFO's successful application for an unexplained wealth order against Schools' ex-wife earlier this year, which enabled the seizure and sale of a Lake District property for £1.1 million in September. Paul Napper, the SFO's head of proceeds of crime, emphasized that Kennedy had "funded a lavish lifestyle with other people's life savings" while many victims "lost everything when his scheme collapsed."

International Implications and Policy Response

The Axiom case highlights ongoing vulnerabilities in cross-border investment schemes, particularly those involving offshore funds in jurisdictions like the Cayman Islands. The use of offshore registration and complex international financial structures enabled the fund to operate largely outside the immediate reach of UK regulators for an extended period. The SFO's use of unexplained wealth orders represents an increasingly important tool for UK authorities in recovering assets from international financial crimes, though questions remain about the adequacy of regulatory oversight for funds operating across multiple jurisdictions.

Sources

This report draws on court proceedings at Southwark Crown Court and the High Court, statements from the Serious Fraud Office, and publicly available records regarding the Axiom Legal Finance Fund case between 2019 and 2024.