In one of the largest penalties awarded against a law firm by the Solicitors Disciplinary Tribunal, Clyde & Co has been fined £50,000, while three partners also received £10,000 each in fines for breaching accounting and money laundering rules.
In a case brought by the Solicitors Regulation Authority (SRA), the partners admitted they allowed a client bank account to be used as a banking facility, acting against SRA accounting rules and in breach of obligations under money laundering regulations.
Clydes was fined £50,000 and corporate partners Christopher Duffy (pictured), Simon Gamblin and projects partner Nick Purnell all received fines of £10,000.
The fine was handed down following a hearing on 21 March. Clydes was represented by corporate insurance partner David Langley, while the SRA was represented by Bevan Brittan solicitor Annelise Allen-Norris. A judgment from the tribunal is expected in the coming weeks.
Duffy and Purnell admitted they had failed to take on guidance of the Law Society’s fraudulent financial arrangements in acting as an escrow agent on behalf of the client.
Clydes was also judged to have failed to follow rules on dealing with dormant client balances. The client involved in the case was not named in the settlement.
The firm said in a statement: ‘We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them.
‘We acknowledge that in three matters that occurred in 2013 and prior, we did not meet those high standards and the firm and three of its partners did act in breach of the SRA accounts rules and The money laundering regulations, which also led to breaches of certain SRA principles and code.
‘We believe it to be clear and the SRA does not dispute, that any mistakes made were honest and inadvertent. It is not alleged that the firm or the three partners lacked integrity, probity or trustworthiness, or laundered or misappropriated money.
‘We have worked constructively with our regulator, the SRA and we are confident that the circumstances which led to these breaches could not happen again. We have since reviewed and strengthened a number of aspects of our approach to risk management.’
The fine handed down to Clydes is the joint largest fine for a law firm, matching a fine to Fulgers in 2014. West End firm Fulgers was fined £50,000 for using the client account of Portsmouth FC to channel £10m, using it as a banking facility to favour certain creditors. The SDT also fined two partners a total of £25,000.
The fine is also one of the largest ever handed down by the SDT and the largest to a City law firm. Earlier this year, human rights lawyer professor Phil Shiner was ordered to pay £250,000 in costs and was struck off over the pursuit of false allegations against British soldiers in Iraq.