The London office of a prominent US law firm is under scrutiny by regulators.
- Allegations suggest deficiencies in anti-money laundering (AML) controls over several years.
- The Solicitors Regulation Authority (SRA) is pursuing a disciplinary tribunal, citing significant compliance failures.
- Simpson Thacher & Bartlett defends its practices as historical concerns, denying any occurrence of money laundering.
- The firm assures full cooperation with the ongoing investigation, expressing disappointment in the SRA’s decision.
The London branch of a well-known US law firm is facing a disciplinary hearing by the Solicitors Disciplinary Tribunal (SDT) over accusations of inadequate anti-money laundering (AML) controls that purportedly persisted over several years. This decision emanates from the Solicitors Regulation Authority (SRA), who has deemed the alleged lapses sufficiently serious to warrant tribunal proceedings.
The charges, described in a notice of prosecution, are comparable to those that have resulted in fines for numerous law firms in the past few months. However, the SRA’s move to escalate the matter to a tribunal indicates a belief that the breaches require a more substantial penalty than the maximum £25,000 the SRA can impose, possibly linked to the firm’s significant turnover.
Simpson Thacher & Bartlett, the firm in question, has voiced disappointment with the SRA’s action, characterising the cited AML deficits as “historical”. An official spokesperson clarified that throughout the period in question, there was no actual occurrence of money laundering nor any harm inflicted on clients or third parties due to the alleged deficiencies.
Specific allegations include a lack of a comprehensive firm-wide risk assessment from June 2017 to March 2020 and the absence of “fully compliant” protocols for the subsequent three years. Moreover, the firm reportedly failed to maintain adequate policies, controls, or procedures from June 2017 to January 2023. The allegations also cover non-compliance in client and matter risk assessments on four specific files between June 2017 and October 2022.
It is crucial to note that these allegations have yet to be proven. A firm spokeswoman underlined their disappointment, emphasising the firm’s cooperation with the SRA throughout the investigation and their commitment to robust compliance operations. Further commentary from the firm is limited due to the ongoing nature of the proceedings.
The case underscores the rigorous scrutiny on AML compliance within the legal industry.
