Three Clyde & Co partners have been ordered to pay £10,000 each by the Solicitors Disciplinary Tribunal as part of the joint largest fine the tribunal has ever levied.
Christopher Duffy, Simon Gamblin and Nick Purnell allowed a client account to be used as a banking facility and admitted acting contrary to SRA Accounts Rules and the Money Laundering Regulations 2007.
Clyde & Co, Duffy and Purnell also admitted that they had failed to follow the Law Society’s guidance on fraudulent financial arrangements and failed to follow rules governing dormant client balances. Which meant they effectively acted as an escrow agent in "dubious financial arrangements or investment schemes". Each was fined £10,000 and the firm was also fined £50,000. It is the joint largest fine ever imposed by the SDT on a firm, matching the £50,000 levied on Fulgers LLP in 2014. Fulgers was found to have allowed Portsmouth FC to use its client account when the club was facing winding up and its bank accounts had been frozen. The identity of the relevant Clyde &Co client was not revealed.
"I don't think you need to carry out those checks, for we are legitimate businessmen."
In a statement Clyde & Co said, "We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them", but accepted 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 The Money Laundering Regulations, which also led to breaches of certain SRA Principles and Code".
Clyde & Co emphasised that "any mistakes made were honest and inadvertent" and that "it is not alleged that the firm or the three partners lacked integrity, probity or trustworthiness, or laundered or misappropriated money". The firm said it has since "reviewed and strengthened a number of aspects of our approach to risk management" and "worked constructively" with the SRA so that "the circumstances which led to these breaches could not happen again".
Luckily staff have already made up the £50k by working through a drought.