Top 20 firm Clyde & Co and one of its former senior solicitors today admitted failing in their obligations to ensure that a client was not laundering money.
In a statement of agreed facts and admissions to the Solicitors Disciplinary Tribunal, Clyde & Co and shipping lawyer Edward Henry Mills-Webb both agreed they had committed professional misconduct with regard to a former client of more than four years. There was no evidence that the client or its principals were involved in money laundering or financial crime.
Both respondents admitted that they should have obtained more complete documents for the former client, a shipping company as well as a copy of the passport of the company’s owner. The only documents obtained when the client was taken on in 2014 were six years old, and the firm and Mills-Webb accepted that they should have done more to understand the nature and structure of the business.
The tribunal heard today that Mills-Webb was chair of the firm’s marine global practice group who had entered discussions in July 2014 with the company about whether Clyde & Co could hold money as an escrow agent in ship purchases.
Mills-Webb, admitted in 2003, accepted that he should have taken more active steps to ensure the risks of certain transactions were known. The firm also accepted it should have done more to elicit information to spot certain red flags about the client’s owner.
Mills-Webb said he viewed the client as posing a normal level of risk from an AML perspective and had agreed with the firm to make periodic checks. However, on four transactions these checks were not made and it was accepted that due diligence was ‘inadequate’.
Funds were received, without further checks, either because the firm’s accounts staff believed the payer had been subject to appropriate checks, or because Mills-Webb was proceeding on the mistaken belief that the firm would undertake necessary checks.
For the SRA, Andrew Tabachnik KC told the tribunal that the firm failed to pick up on opportunities to revisit transactions involving the client and did not take all reasonable steps for due diligence.
He added: ‘None of this can be put down to the conduct of just one individual acting on a rogue basis and going beyond fit-for-purpose policies.’
The tribunal was due to consider sanction this afternoon. The hearing continues.