Clyde & Co and Former Partner Edward Mills-Webb Fined For Breaching Anti-Money Laundering Regulations
A penalty of £500k, the highest ever, has been imposed on them
Clyde & Co and Former Partner Edward Mills-Webb Fined For Breaching Anti-Money Laundering Regulations
A penalty of £500k, the highest ever, has been imposed on them
Clyde & Co has been penalized by the Solicitors Disciplinary Tribunal (SDT) after it admitted failing to comply with anti-money laundering regulations.
Former partner Edward Mills-Webb was also fined £11,900.
The Solicitors Regulation Authority (SRA) referred Clyde & Co and Mills-Webb to the SDT in August last after an investigation into possible breaches of anti-money laundering rules. These are related to an unnamed former shipping client.
In 2014, Clyde & Co began working with the client and moved funds for it through an escrow account, which the firm managed. It was later used for the purchase of various ships.
The firm admitted that it did not conduct adequate due diligence on the company and then failed to monitor and apply enhanced customer verification measures. It also failed to analyze the principals involved in the transactions.
Mills-Webb admitted that he ‘materially’ contributed to the failures. However, there was no evidence that the client or its principals were involved in money laundering or financial crime.
Mills-Webb presently works as a consultant at city firm Preston Turnball, set up in 2019 by a group of former Clyde & Co partners. He declined to comment through his representative firm, Herbert Smith Freehills.
A spokesperson for Clydes and Co stated, “The firm sincerely regrets any compliance failings relating to a series of client-shipping transactions that we identified in 2018, which led to this hearing. Having reported the issue to the SRA, we fully assisted with its investigation and have sought to learn appropriate lessons.
“Under the firm’s current leadership, we have significantly enhanced our risk management and regulatory compliance capabilities including restructuring our in-house risk and legal functions; appointing a head of financial crime; and further enhancing our processes, policies, levels of oversight, and training.
“We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them. This SDT determination is a reminder that regulatory compliance and risk management require continuous, diligent attention. Our senior management is fully committed to ensuring firm-wide adherence.”
Clyde & Co received a base level fine of £50,000 which was increased to £500,000 based on its size and revenue. The firm must also pay £128,000.
The fine is the joint highest handed out by the SDT. It matches that it imposed on the US firm Locke Lord in 2017 for failing to adequately supervise a UK partner who engaged in ‘dubious financial arrangements’ with the bank account of a client.