In a recent development that has sent ripples through the legal community, prominent City law firm Clyde & Co finds itself once again in the spotlight as it faces the Solicitors Disciplinary Tribunal (SDT) for alleged breaches of the Money Laundering Regulations. This is the second time the firm has been hauled before the SDT on such charges, with the previous incident resulting in a substantial fine in 2017. The firm’s current predicament underscores the growing scrutiny surrounding anti-money laundering (AML) practices within the legal sector.
The Notices published by the Solicitors Regulation Authority (SRA) indicate that both Clyde & Co and a former partner, Edward Mills-Webb, have been summoned to answer allegations related to their handling of client matters. The accusations encompass failures to comply with anti-money laundering protocols, spanning a period of over four years.
Clyde & Co’s official response has been to assert their commitment to upholding the highest ethical and professional standards. A spokesperson from the firm commented, “We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them, and we are reviewing these charges. It would be inappropriate to comment further.” The statement acknowledges that they had suspended Mills-Webb and referred him to the SRA in early 2019, during which time he resigned from the firm.
It’s worth noting that Edward Mills-Webb, the former partner at the center of these allegations, is now associated with City firm Preston Turnball. This firm was established in 2019 after a group of shipping partners left Clyde & Co. Mills-Webb’s move to another firm raises questions about the implications of such regulatory actions on a lawyer’s career trajectory.
Rudi Kesic, CEO of Verify 365, a leading provider of AML compliance solutions, weighed in on the situation, stating, “Cases like these highlight the crucial importance of robust anti-money laundering procedures within the legal sector. Ensuring compliance with AML regulations not only safeguards law firms from regulatory repercussions but also preserves the integrity of the entire industry.”
This isn’t the first time Clyde & Co has found itself in trouble over AML issues. In 2017, the firm was fined £50,000, and three of its partners were fined £10,000 each for allowing their client account to be used as a banking facility, which constituted a breach of anti-money laundering rules. The tribunal’s verdict back then was particularly notable, as it highlighted the firm’s status as a large and previously reputable entity, making the failures seem even more glaring.
After the 2017 incident, Clyde & Co expressed confidence that the circumstances leading to those breaches would not recur. The firm claimed to have taken steps to review and strengthen its risk management practices. However, the recent charges indicate that further lapses were allegedly detected in their subsequent AML procedures.
Clyde & Co’s case also follows in the wake of another major law firm, Dentons, being referred to the SDT for alleged AML failures. This convergence of cases emphasizes the increasing regulatory scrutiny on the legal sector’s compliance with money laundering regulations.
In conclusion, the unfolding situation involving Clyde & Co serves as a stark reminder that the legal industry, like any other, is not immune to the critical gaze of regulators. As AML regulations continue to evolve and intensify, law firms must ensure their internal protocols and practices are robust enough to prevent any lapses that could potentially lead to serious consequences. The outcome of this case could potentially set a precedent and influence the approach law firms take toward AML compliance in the future.
