World's Largest Law Firm Faces Allegations of Anti-Money Laundering Failures

Dentons, the world’s largest law firm, is facing allegations before Britain’s Solicitors Disciplinary Tribunal (SRA) that it breached anti-money laundering regulations.

The tribunal has certified there is a case to answer in respect of the firm’s alleged failure to take adequate measures to establish a client’s source of wealth.

A notice published by the SRA reveals the allegations relate to a period between May 2013 and June 2017 when Dentons acted for a ‘politically exposed person or his associated entities’.

It’s claimed Dentons breached the Money Laundering Regulations 2007 by failing to comply with its legal and regulatory obligations, failing to run the business effectively in accordance with proper governance and sound financial and risk management principles and failing to comply with anti-money laundering legislation.

The SRA claims such conduct failed to maintain the trust the public places in the firm and in the provision of legal services.

The allegations are subject to a hearing before the tribunal and are as yet unproven. The hearing is expected to take place later this year.

Separately, investigators at the solicitors’ watchdog are also pursuing Clyde & Co, the specialist maritime and insurance firm.

Officials at the authority, which oversees 150,000 practising solicitors in England and Wales, said the allegations involving Clyde & Co related to “the firm’s handling of a number of matters on behalf of a client and companies used by the client”. It is alleged that the firm’s activities regarding that client had involved a “failure to comply with anti-money laundering procedures . . . spanning a period of over four years”.

The watchdog confirmed that it was also prosecuting Edward Mills-Webb, a former partner at Clyde & Co.

Mills-Webb has since moved to another City firm, Preston Turnbull, where he is described as specialising in “the international sale and movement of goods, finance, insurance and regulatory issues”.

Clyde & Co announced this month that its revenue had increased by 20 per cent over the past year to more than £788 million. It was the firm’s 25th consecutive year of growth, with annual profit rising by 6 per cent to more than £169 million. Full equity partners made £708,000 each on average last year.

Meanwhile, regulators confirmed that they were also prosecuting the London and Middle East operations of Dentons.

The watchdog said the law firm was accused of failing “to take adequate measures to establish [a] client’s source of wealth and/or funds” while acting for “a politically exposed person or his associated entities”.

The alleged breaches were said to have occurred between 2013 and 2017 and Dentons is also accused of having “failed to comply with its legal and regulatory obligations, to run the business effectively in accordance with proper governance and sound financial and risk management principles and failed to comply with anti-money laundering legislation”.

The prosecution was the second major setback in two weeks for Dentons. Earlier this month the firm blamed beefed-up Chinese data security and privacy laws for forcing it to quit the jurisdiction.

Responding to the prosecutions, Clyde & Co said that the firm had suspended Mills-Webb and had referred him to the watchdog.

“We assisted the SRA fully with its investigations,” it said, adding: “We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them, and we are reviewing these charges.”

Dentons said the firm had “co-operated fully with the SRA throughout this investigation, which relates to a former client, and we will continue to do so. As a firm we are committed to strict compliance with all laws, regulations and professional standards of the jurisdictions we operate in.”

Mills-Webb and Preston Turnbull did not respond to requests for comment.

By fLEXI tEAM