A former Locke Lord partner who played a key role in the US firm receiving the largest ever fine from the Solicitors Disciplinary Tribunal (SDT) has been struck off and ordered to pay £70,000 in costs.
Jonathan Denton, a banking and finance partner at Locke Lord, was sacked in July 2015 after using the firm’s client account for transactions ‘that bore the hallmarks of dubious financial arrangements or investment schemes’, according to a judgement from the SDT last November.
As a result, Locke Lord was fined a record £500,000 that same month for failing to prevent Denton’s actions.
In a new SDT judgment, filed on 17 May, Denton’s conduct received scathing criticism, with the tribunal deeming his behaviour ‘was motivated by financial gain’ and a ‘flagrant breach of the trust placed in him by his clients’. The tribunal found Denton liable for 70% of the overall costs, which stood at £76,613, however, this was lowered to the ‘appropriate and reasonable’ amount of £70,000.
The Solicitors Regulation Authority (SRA), which was prosecuting, was represented by Capsticks partner Daniel Purcell, who instructed Paul Ozin QC of 23 Essex Street. Denton did not attend the hearing and was thus unrepresented. The judgment noted: ‘In choosing not to respond, the respondent had failed to comply with his legal and regulatory obligations and had failed to deal with his regulator in an open, timely and co-operative manner’.
Denton’s misconduct dates back to August 2012, when Locke Lord began acting for clients Ikaya and Sionne, which claimed to operate high-yield investment schemes. Subsequently, an estimated £21m of investment funds went into the firm’s client account between September 2012 and April 2015, from both individual and corporate investors.
Over the period of the retainer, Locke Lord billed a total of 1,424.9 hours and delivered invoices from the firm to Ikaya totalling £532,044.79, £657,194.37 and €286,902.52.
Denton had appointed himself as the sole director and shareholder of Ikaya, with his wife acting as company secretary. Locke Lorde was even contacted by US intelligence service the Federal Bureau of Investigation (FBI) in 2013, raising concerns that someone was trying to divert £2m from the client account for their own personal use.
Locke Lord’s £500,000 sanction was twice the previous record set by White & Case, which was fined £250,000 in July 2017 for failing to identify a conflict of interest and protect confidentiality regarding a $2bn Ukrainian commercial dispute.
For more on Denton’s conduct and the SRA’s prosecution drive, read Off the leash.