10:19, April 04 715 0

2017-04-04 10:19:07
SDT hits Clyde and Co with record £50,000 fine

The Solicitors Disciplinary Tribunal (SDT) has handed out one of its largest-ever penalties  to Clyde and Co, issuing a £50,000 fine for breaching accounting and money laundering rules.

As part of the fine, three Clyde & Co partners – Christopher Duffy, Simon Gamblin and Nick Purnell – each received a £10,000 fine.

The partners admitted breaching Solicitors Regulatory Authority (SRA) rules when they allowed a client bank account to be used as a banking facility. The tribunal also found that the partners failed to act in accordance with their obligations under the Money Laundering Regulations 2007.

Duffy and Purnell conceded that in acting as an escrow agent they failed to follow the Law Society’s accounting rules.

Clyde and Co told The Lawyer: “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 money laundering regulations, which also led to breaches of certain SRA principles and code.

The firm said that that any mistakes made by the partners 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,” a firm spokesperson continued.

“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 SRA said the fine was the joint-highest ever given to a firm. In February 2014, the tribunal imposed a £50,000 fine on Fulgers LLP and £20,000 and £5,000 on its partners David Berens and Bryan Fulger, respectively.

Berens authorised the use of the firm’s client account for the benefit of Portsmouth FC at a time when the club was facing winding-up by the Inland Revenue and when the club’s bank had frozen its accounts. More than £10m of Portsmouth FC’s money passed through the firm’s client account in four months.

The fine issued to Clydes was handed down following a hearing on 21 March. Clydes was represented by corporate insurance partner David Langley, while the SRA was represented by Annelise Allen-Norris. An official judgment from the tribunal is expected in the coming weeks.