US law firm given record-breaking £500,000 fine

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Nov 09, 2017
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The London office of Locke Lord was fined for failing to prevent a lawyer from being involved in dubious transactions

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A disciplinary tribunal has hit a respected American law firm with a £500,000 fine — the largest in English legal profession history.

In an “agreed outcome” revealed yesterday, the Solicitors Disciplinary Tribunal fined Locke Lord for failing to prevent a lawyer at the firm’s City of London office from being involved in transactions “that bore the hallmarks of dubious financial arrangements or investment schemes”.

Managing partners at the Square Mile office admitted breaches of the professional rules. However, the solicitor, Jonathan Denton, has not admitted wrongdoing and his case will go to a full hearing of the tribunal. A date for the hearing has yet to be announced. 

The firm confirmed that Denton had left its London office in October 2015 and that the matters resulting in the fine “relate only to clients for whom he worked”. A Locke Lord spokesman added that “none of the firm’s other clients were affected by Denton’s actions”. 

The City office of the firm, which has its headquarters in Texas, admitted that in addition to the main charge, the firm had failed to prevent Denton “from directing or requesting payments into, and transfers or withdrawals from, the firm’s client account which were not related to an underlying legal transaction or a service forming part of the firm’s normal regulated activities”.

The tribunal statement also confirmed that the firm had failed to put in place effective systems and controls “to enable it to identify and assess potential conflicts of interest”.

The office was also found to have failed to notice elements of Denton’s behaviour, which should have alerted managers to potential wrongdoing.

After the fine was announced, the firm issued a statement saying “we regret what has happened, but we are pleased to note that the [Solicitors Regulation Authority] accepted our position that the firm and its senior officers did not act dishonestly or with conscious impropriety, or turn a blind eye to Denton’s conduct.”

The firm said that it had implemented improvements to its procedures after the incident. “We remain committed to ensuring that we are at the forefront of best practice, that we uphold the legal profession’s high standards and that this situation does not arise again,” it said.

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