Locke Lord has been fined £500,000 by the Solicitors Disciplinary Tribunal for a lawyer's allegedly dodgy dealings.
The US firm was found guilty of failing to prevent Jonathan Denton, counsel in its 13-partner London office, from involving himself and the firm in transactions "that bore the hallmarks of dubious financial arrangements or investment schemes". It was also guilty of failing to prevent Denton from using the client account in ways "which were not related to an underlying legal transaction", and of failing to have effective systems and controls in place to enable it to identify and assess conflicts of interest.
In addition Locke Lord failed to "properly supervise" Denton, even "after indicators became known to the firm of matters necessitating such supervision". It is not known what those indicators were, but it should have known he was a live one when he joined the firm in 2012 and gave interviews stating, "I consider myself to be a bit of an entrepreneur".
Denton, an expert in FSA compliance regulations and irony, is facing his own prosecution by the SRA. As well as the dubious schemes, he is accused of producing false invoices to mislead investors, failing to protect client money and creating a conflict of interest by acting for a company he controlled. And for lying about the status of investments administered by Locke Lord. And for failing to cooperate with the SRA. RollOnFriday understands he is also under investigation by the police.
Locke Lord's half million penalty dwarfs the previous record earned by White & Case earlier this year. Sadly for the SRA, it all goes to the Treasury, so will be no help at all paying that fat Leigh Day bill.
A spokesman for Locke Lord LLP said, "The matters investigated by the SRA concern the actions of Jonathan Denton and relate only to clients for whom he worked. None of the firm's other clients were affected by Denton's actions". [Translation: Clients were affected.]
He continued, “We regret what has happened, [We regret getting double White & Case's fine] but we are pleased to note that the SRA accepted our position that the firm and its senior officers did not act dishonestly or with conscious impropriety [There was unconscious impropriety], or turn a blind eye to Denton's conduct". [Our systems were so bad we didn't even know what was going on.]
He said, “After Denton's departure from the Firm – effective October 2015 – and in consideration of matters that came to light, steps were taken to review existing practices and procedure. [We took down his nameplate.] A number of changes and improvements were made". [We burnt it and flushed the ashes down the loo.]
He added, “We remain committed to ensuring that we are at the forefront of best practice, that we uphold the legal profession's high standards, and that this situation does not arise again”. [We remain committed to not getting fined another £500,000.]
Tip Off ROF
The US firm was found guilty of failing to prevent Jonathan Denton, counsel in its 13-partner London office, from involving himself and the firm in transactions "that bore the hallmarks of dubious financial arrangements or investment schemes". It was also guilty of failing to prevent Denton from using the client account in ways "which were not related to an underlying legal transaction", and of failing to have effective systems and controls in place to enable it to identify and assess conflicts of interest.
In addition Locke Lord failed to "properly supervise" Denton, even "after indicators became known to the firm of matters necessitating such supervision". It is not known what those indicators were, but it should have known he was a live one when he joined the firm in 2012 and gave interviews stating, "I consider myself to be a bit of an entrepreneur".
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Locke Lord's office yesterday. How it might have looked. |
Denton, an expert in FSA compliance regulations and irony, is facing his own prosecution by the SRA. As well as the dubious schemes, he is accused of producing false invoices to mislead investors, failing to protect client money and creating a conflict of interest by acting for a company he controlled. And for lying about the status of investments administered by Locke Lord. And for failing to cooperate with the SRA. RollOnFriday understands he is also under investigation by the police.
Locke Lord's half million penalty dwarfs the previous record earned by White & Case earlier this year. Sadly for the SRA, it all goes to the Treasury, so will be no help at all paying that fat Leigh Day bill.
A spokesman for Locke Lord LLP said, "The matters investigated by the SRA concern the actions of Jonathan Denton and relate only to clients for whom he worked. None of the firm's other clients were affected by Denton's actions". [Translation: Clients were affected.]
He continued, “We regret what has happened, [We regret getting double White & Case's fine] but we are pleased to note that the SRA accepted our position that the firm and its senior officers did not act dishonestly or with conscious impropriety [There was unconscious impropriety], or turn a blind eye to Denton's conduct". [Our systems were so bad we didn't even know what was going on.]
He said, “After Denton's departure from the Firm – effective October 2015 – and in consideration of matters that came to light, steps were taken to review existing practices and procedure. [We took down his nameplate.] A number of changes and improvements were made". [We burnt it and flushed the ashes down the loo.]
He added, “We remain committed to ensuring that we are at the forefront of best practice, that we uphold the legal profession's high standards, and that this situation does not arise again”. [We remain committed to not getting fined another £500,000.]
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Bizarre thing is that despite -
“We remain committed to ensuring that we are at the forefront of best practice, that we uphold the legal profession's high standards, and that this situation does not arise again"
The same COLP and COFA at the time are still in place and the head of corporate at the time is about to be made managing partner.
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