Clyde & Co faces fine after admitting to anti-money laundering failures
London law firm Clyde & Co looks set to pay a hefty fine after it admitted today that it failed to comply with anti-money laundering regulations.
Last August, the Solicitors Regulation Authority (SRA) referred the law firm and a former partner, Ed Mills-Webb over to the Solicitors Disciplinary Tribunal (SDT), following an investigation into potential breaches of anti-money laundering rules by the firm and Mills-Webb.
During a hearing at the Tribunal today, the barrister for the SRA, Andrew Tabachnik KC, said that the law firm and the former partner have admitted to the breaches.
In a statement of agreed facts and admissions, seen by City A.M., it was the handling funds of an unnamed client, who is involved in the shipping industry, that sparked the case.
The firm failed to carry out proper background checks on the funds it moved for this client, via an escrow account that the firm managed, over a four year period, the court documents said.
The SRA said the firm and Mills-Webb failed to apply customer due diligence measures, failed to conduct ongoing monitoring of its business relationships and failed to apply enhanced customer due diligence measures during this time.
Both the law firm and Mills-Webb accepted all of the SRA’s conclusions, the documents said.
Over the course of this week, the Tribunal will hear arguments on the size of the fine that the firm and Mills-Webb will be forced to pay. Tabachnik suggested that the minimum fine the firm would face is £100,000, while the starting point for Mills-Webbs’s fine should be £15,000.
A spokesperson for Clyde & Co said that it reported the issues in the case to the SRA and suspended Mills-Webb before he resigned in 2019.
“We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them. As this hearing is ongoing it is inappropriate to comment further,” the spokesperson added.
Mills-Webb is now a consultant at boutique firm Preston Turnbull after leaving the firm. He was part of a group of partners that included Andrew Preston, Elizabeth Turnbull, Fanos Theophani and Rob Collins, who all left the firm to set up Preston Turnbull.
Mills-Webb’s legal representative said he will not be commenting while the tribunal hearing is ongoing.
The case marks Clyde & Co’s second SDT appearance in seven years. Back in 2017, the SDT issued a £50,000 fine – one of the largest penalties handed out by the tribunal – to Clyde & Co for breaching accounting and anti-money laundering rules, while partners Simon Gamblin and Nick Purnell, and former partner Christopher Duffy, each received a £10,000 fine each.