Former partner also sanctioned
International law firm Clyde & Co has been fined £500,000 by the Solicitor’s Disciplinary Tribunal (SDT) after failing to conduct the due diligence on a client required under anti-money laundering (AML) rules.
Former partner at the outfit, Edward Henry Mills-Webb, was also fined £11,900 after admitting that he “materially contributed” to the failure.
This fine is the joint largest handed down by the SDT, despite the Solicitor’s Regulation Authority (SRA), the body who brought the action, saying that there was no evidence that the firm or their former client were involved in money laundering or financial crime.
Whilst the firm did obtain some documents at the time of taking on the client, a shipping company, these were six years old, with both Clyde and Mills-Webb accepting that they ought to have obtained more complete, recent documents, and done more to assess the business and its dealings. The failings were alleged to have spanned from 2014 to 2019.
On top of the hefty fine, the tribunal ordered that the firm pay costs totalling £128,197, with Mills-Webb told to top up a further £54,941.
The full reasoning is due to be published in the coming weeks.
Responding to the finding, the firm said that it “sincerely regrets any compliance failings”, and that, “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,” it said. “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.”
Chief executive of the SRA, Paul Philip, said that “this fine should be a wake-up call to any firms that are not meeting their responsibilities to have robust anti-money laundering processes in place, otherwise they could be facing a similar penalty… Firms must ensure they are playing proper attention to identifying clients and mitigating money laundering risks.”
This isn’t the first brush that Clyde has had with AML rules. Back in 2017 the firm was fined £50,000, with three partners hit with an additional £10,000 each for accounting failures and AML inadequacies.