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SRA launches probe into Panama Papers law firms
15 April 2016
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After the Financial Conduct Authority (FCA) ordered every financial services company in the country to report on their involvement with Panama, the Solicitors Regulation Authority (SRA) has woken up and politely asked a grand total of four law firms if they were aware of any rum goings-on.

Earlier this week the FCA told all British financial institutions to disclose whether they have conducted business with Mossack Fonseca, the law firm at the centre of the Panama Papers. And having climbed out of bed, buttered two slices of toast and opened its copy of the Guardian, the SRA is now taking action too. Although its investigation is far less ambitious as it is only contacting those law firms which have already been expressly named by the media in connection with the Panama Papers.


  A voiding might occur

The four firms named in the media so far are: 

- Simmons & Simmons. The firm, which was recently caught by RollOnFriday manipulating its trainee retention results, was revealed in the Panama Papers to have worked alongside Mossack Fonseca providing English law advice in relation to the formation of Blairmore Holdings, the offshore fund set up by the British Prime Minister's father.

- HFW. The firm was an adviser to UAE president Khalifa bin Zayed bin Sultan Al Nahyan in relation to his dealings in the UK. He was revealed to be the beneficial owner of companies established in the British Virgin Islands which held properties in London worth more than £1 billion.

- Pettman Smith, a London firm now known as Child & Child following its merger. The London firm has also been named as an adviser to Al Nahyan.

- Trethowans. The firm has been named in the leaked documents as an adviser to Baroness Pamela Sharples, a Conservative member of the House of Lords who has been shown to be a major shareholder of Bahamas-headquartered Nunswell Investments.

A spokesman for the SRA told RollOnFriday that it was writing to the firms to "ask for assurances that they have looked into the matter and have acted appropriately". To which "oh yes" would seem the best answer. He added that the SRA was also liaising with other regulatory bodies.

Being dragged into the story is awkward for the named firms, but it doesn't sound like the SRA's probe is going to be particularly invasive. Trethowans managing partner Chris Whiteley told RollOnFriday that the firms has "answered all of the questions without this causing us any concern".

However none of Simmons, 2Children or HFW would dare comment.
 

  

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anonymous user
15/04/2016 08:23
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Bobbins to that - and those of us who adhere to money laundering rules and take about 2 weeks to do client DD and even open a file should be up in arms about this.

According to its enforcement policy, the SRA's approach is to be "risk-based, proportionate and targeted in any enforcement action we take" (http://www.sra.org.uk/solicitors/enforcement.page). We all know that Mossack Fonseca is just the tip of a very big iceberg. The SRA needs to:
1. investigate all firms who offer "wealth management" services and/or have a "private equity" department (the criminals hide their assets in offshore entities - usually at the top of a rather tall corporate private equity tree),
2. identify those risky matters involving large sums of money, PEPs, dodgy jurisdictions, incomplete money laundering checks,
3. give those firms a serious audit and intervene/refer to SDT/prosecute as necessary, and
4. any firm found to be engaging in poor practices needs (as a bare minimum) to be regularly re-audited until it returns to the fold.

Just as a pointer, the SRA might want to start with firms with London WC and W1 postcodes where the rich and dodgy hang out.
anonymous user
15/04/2016 08:56
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Ángel Gurría, the secretary general of the Organisation for Economic Co-operation and Development, said the release of the Panama Papers showed that there was no room for complacency in the international effort to crack down on tax evasion. He said it was no surprise that the rich and the powerful were using Panama to evade tax as “it is one of the few jurisdictions that has pushed against” international measures to improve tax and ownership transparency.

“We have to crack down on the professional enablers – lawyers, accountants, financial institutions – that play a key role in maintaining the veil of secrecy,” he said.

If you are a "professional enabler" you will hopefully get a knock on the door sometime soon.
anonymous user
15/04/2016 09:01
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1
How comes every tinpot dictator has a London property portfolio?
Shooty*
15/04/2016 09:03
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2Children is a great name. That should stick. Is that what all you fancy London types call them?
anonymous user
15/04/2016 10:00
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So in typical SRA style, all firms will be asked in 2020 about their cyber safeguards, penetration testing and adherence to international information security standards eg ISO27001?
anonymous user
15/04/2016 13:07
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4
"And having climbed out of bed, buttered two slices of toast and opened its copy of the Guardian, the SRA is now taking action too." - Ha!