London law firm Clyde & Co has been ordered to pay a £500,000 fine by a Tribunal today for failing to comply with anti-money laundering regulations.
The legal regulators, the Solicitors Regulation Authority (SRA), referred the law firm and a former partner, Ed Mills-Webb, to the Solicitors Disciplinary Tribunal (SDT) last year after an investigation into potential breaches of anti-money laundering rules.
The law firm and the former partner admitted to the breaches during a hearing at the Tribunal on Tuesday.
The firm admitted that it failed to carry out proper background checks on the funds it moved for a client, via an escrow account that the firm managed, over a four year period.
The SRA said the firm and Mills-Webb failed to apply customer due diligence measures, failed to conduct ongoing monitoring of its business relationships and failed to apply enhanced customer due diligence measures during this time.
Today, the Tribunal ordered the the firm would be fined £500,000 for the breaches while Mills-Webb was fined £11,900.
The firm has also been ordered to pay a contribution to the SRA’s costs of £128,197.48 (70 per cent of total apportioned), while Mills-Webb was ordered SRA’s costs of £54,941.77 (30 per cent of total apportioned).
A spokesperson for the law firm said: “Clyde & Co sincerely regrets any compliance failings – relating to a series of client shipping transactions that we identified in 2018 – which led to this hearing. Having reported the issue to the SRA, we fully assisted with its investigation and have sought to learn appropriate lessons.
“Under the firm’s current leadership, we have significantly enhanced our risk management and regulatory compliance capabilities including restructuring our in-house risk and legal functions; appointing a head of financial crime; and further enhancing our processes, policies, levels of oversight and training.
“We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them. This SDT determination is a reminder that regulatory compliance and risk management requires continuous, diligent attention. Our senior management is fully committed to ensuring firm-wide adherence.”
Paul Philip, SRA chief executive, said: “Money laundering is not a victimless crime and firms have a key part to play in preventing legal services from being used by criminals. Firms must ensure they are playing proper attention to identifying clients and mitigating money laundering risks.
“This fine should be a wake-up call to any firms that are not meeting their responsibilities to have robust AML processes in place, otherwise they could be facing a similar penalty,” he added.
City A.M. contacted Mills-Webb’s lawyer for comment.
Clyde & Co was fined £50,000 back in 2017 for breaching accounting and anti-money laundering rules, while partners Simon Gamblin and Nick Purnell, and former partner Christopher Duffy, each received a £10,000 fine.
