November 13, 2017

Locke Lord Fined £500,000

Locke Lord LLP UK

Among a recent list of firms being penalized—including White & Case (which was fined £250,000 in July as the firm had failed to identify a conflict of interest and protect confidential information in a $2bn Ukrainian commercial dispute) and Clyde & Co (which was hit with a £50,000 fine, and three of its partners also received individual £10,000 fines, for breaching accounting and money laundering rules)—the most recent one appears to be Locke Lord.

The Solicitors Disciplinary Tribunal (SDT - an independent statutory tribunal appointed by the President of the High Court to consider complaints of misconduct against solicitors) handed Locke Lord—a US-based full service, International law firm—its largest ever financial penalty imposed on a law firm, fining £500,000, after one of its former UK lawyers, Jonathan Denton, engaged in “dubious financial arrangements” with a client’s bank account.

Denton had left Locke Lord in October 2015. According to the details of the decision published by the Solicitors Regulation Authority (SRA), the firm had “failed to prevent” Denton from using a client account for “transactions that bore the hallmarks of dubious financial arrangements.”

In addition, Locke Lord also 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.”

Notably, the other findings against Locke Lord showed that it failed to have effective systems in place to identify conflicts of interest, as well as a failure to “properly supervise the work of a solicitor working in the firm” after “indicators became known to the firm of matters necessitating such supervision.”

In this regard, a spokesperson for Locke Lord clarified that “The matters investigated by the SRA concern the actions of Jonathan Denton and relate only to clients for whom he worked. None of the firm’s other clients were affected by Denton’s actions. We regret what has happened, but we are pleased to note that the SRA 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.”

Notably, Locke Lord stated that “steps were taken to review existing practices” and “a number of changes and improvements were made” following Denton’s departure. Denton has been referred to the SDT.

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