The Solicitors Disciplinary Tribunal (SDT) has handed Locke Lord its largest ever financial penalty imposed on a law firm, fining the US-based firm £500,000 after one of its former UK lawyers engaged in ‘dubious financial arrangements’ with a client’s bank account.
The lawyer in question, Jonathan Denton, had left Locke Lord in October 2015. Details of the decision published this week by the Solicitors Regulation Authority (SRA) disclose that the firm had ‘failed to prevent’ Denton from using a client account for ‘transactions that bore the hallmarks of dubious financial arrangements’.
Locke Lord was also found to have failed to prevent Denton from ‘directing or requesting payments into, and transfers or withdrawals from, the firm’s client account which were not related to an underlying legal transaction’.
The other findings against Locke Lord show that it failed to have effective systems in place to identify conflicts of interest, as well as a failure to ‘properly supervise the work of a solicitor working in the firm’ after ‘indicators became known to the firm of matters necessitating such supervision’.
A spokesperson for Locke Lord said: ‘The matters investigated by the SRA concern the actions of Jonathan Denton and relate only to clients for whom he worked. None of the firm’s other clients were affected by Denton’s actions.
‘We regret what has happened, but we are pleased to note that the SRA accepted our position that the firm and its senior officers did not act dishonestly or with conscious impropriety, or turn a blind eye to Denton’s conduct.’
The firm insisted that ‘steps were taken to review existing practices’ and ‘a number of changes and improvements were made’ following Denton’s departure.
It has only been four months since the previous record fine given to a law firm by the SDT, when White & Case was fined £250,000 in July. The penalty came after the firm failed to identify a conflict of interest and protect confidential information in a $2bn Ukrainian commercial dispute.
In April, Clyde & Co was hit with a £50,000 fine, and three of its partners also received individual £10,000 fines, for breaching accounting and money laundering rules.