Legal Business Blogs

SRA to probe City firm connections to Panama Papers

The Solicitors Regulation Authority (SRA) has asked several law firms to clarify whether they are linked to the law firm at the heart of the Panama Papers leak, Mossack Fonseca.

The regulator confirmed last week it is writing to firms which were identified in the media as being linked to the Panama Papers leak. Those highlighted in reports include LB 100 firms Simmons & Simmons and Holman Fenwick Willan (HFW) as well as London firm Child & Child.

An SRA spokesperson said: ‘We are writing to those firms identified in the media as being linked to the Panama papers to ask for assurances that they have looked into the matter and have acted appropriately.’

He added: ‘We are also liaising with other authorities with an interest.’ It is understood the regulator has been in contact with the Financial Conduct Authority (FCA) and other regulators about the leaks.

The news follows an announcement that the FCA had written to banks and other financial companies to carry out a similar review.

The leak has revealed some 12 world leaders, including close associates of Russia’s president Vladimir Putin, and 143 politicians have used the Panamanian law firm to avoid tax in developed countries.

Mossack Fonseca released a statement last Sunday (April 3) which said: ‘It is legal and common for companies to establish commercial entities in different jurisdictions for a variety of legitimate reasons, including conducting cross-border mergers and acquisitions, bankruptcies, estate planning, personal safety, restructuring and pooling of investment capital from different jurisdictions in neutral legal and tax regimes that does not benefit or disadvantage any one investor.’

From a legal industry perspective, the leaks are expected to put additional pressure on the offshore community, and should even shift some clients towards large corporate firms.

For more analysis on the Panama Papers see: ‘Comment: Shifting the Overton window – Panama Papers will change the consensus on tax (and boost corporate law firms)’