An extraordinary week in the Axiom Ince saga has seen multiple police raids on properties, ex-employees considering claims against the company and the Solicitors Regulation Authority still facing questions about its actions.

The Serious Fraud Office announced on Tuesday that it had arrested seven individuals in relation to the collapsed firm and its £66m of missing client money. More than 80 investigators had carried out searches across nine sites in the south east of England.

Nick Ephgrave QPM, director of the SFO, said: ‘There are a number of significant questions that need to be answered: clients from this law firm are missing many millions of pounds and more than 1,400 of its staff have lost their jobs. The impact on those affected is extremely serious.’

Axiom Ince was shut down by the SRA last month and has since entered administration. Its former managing partner Pragnesh Modhwadia and two other directors were suspended by the regulator in August. It was subsequently revealed in court by Modhwadia’s lawyer that client money had been used to buy and renovate properties and to fund the purchases of stricken firms Ince Group and Plexus Legal.

The SRA, which continues to discuss whether solicitors should pay a levy to cover client losses, is still under fire over the speed of its response. In a statement defending its actions, the regulator said suspected dishonesty and missing client money were uncovered in late July. There had been complaints about the firm in previous years – and the SRA had visited once about an unrelated immigration matter – but these were ‘nothing out of the ordinary’.

The SRA said that before July, apart from any individuals who may have been complicit, ‘no one was aware of or identified issues with the client account. This includes partners in the firm, accountants, banks or auditors. It was not raised in any of the accountant’s reports – these must be produced annually by an independent accountant who must highlight if a firm has not met our rules, and if client money is at risk.’

Regulatory expert Frank Maher, a partner with Liverpool firm Legal Risk, said the SRA had acknowledged that the deal to buy Ince in April had prompted the SRA to look into the firm, but this itself raised questions about the speed of the response.

Maher added: ‘I would have expected there to be engagement between the SRA and Ince during the weeks or months before the announcement of the acquisition of Ince, given its known financial woes and the risk of a 700-employee firm collapsing, and this should have revealed, probably in the two weeks before, that Axiom DWFM were in talks to acquire Ince.

‘That should have triggered discussion as to how what was essentially a high street firm was going to manage a top-100 international practice.’

Meanwhile, Manchester firm Pearson Legal says it has been approached by more than 130 former Axiom Ince employees who were made redundant and are now seeking a protective award. The same firm is representing former employees of the collapsed law firm group Metamorph.

Pearson partner Alan Lewis said: ‘We are collating the relevant information to support those employees in bringing a group protective award claim. This is likely to be the largest protective award claim ever brought against a firm of solicitors.’