Dentons accused of anti-money laundering failures when representing a 'politically exposed' client

Monday 04 March 2024 4:11 pm

The largest law firm in the world, Dentons, is defending itself against allegations from the legal regulator that it breached anti-money laundering regulations when acting for a client.

Starting on Monday, the law firm was at the Solicitors Disciplinary Tribunal (SDT) over allegations that the law firm failed when acting for a politically exposed person (PEP) to take adequate measures to establish his source of wealth.

The person, known as Client A, could not be named due to confidential order, but they were “high risk” and labelled as a PEP.

The Solicitors Regulation Authority (SRA) referred the law firm the the SDT back in December 2022, however, the decision to do that was published in July 2023.

According to the SRA’s barrister, James Ramsden KC of Astraea Group, the firm failed while acting for a PEP between May 2013 and June 2017 to discharge its obligation to source the wealth and funds of its clients.

The senior barrister explained that back in 2005 when the United Kingdom was still a member of the European Union, the EU Parliament established laws over financing terrorism, this including PEP.

He stated that “all regulators know what PEP is”, as he explained it is someone holds power and influence in a country and are deemed to be higher risk for potential involvement in bribery and corruption.

Ramsden KC pointed out that Dentons are responsible solely for the Money Laundering Regulations 2007.

However, he did add that the partner that this client belong to was François Chateau, a French lawyer based in the firm’s New York office. This client in question wasn’t originally a Dentons client, they came to the firm following the merger with Salans, Fraser Milner Casgrain in 2013.

It was the SRA’s barrister who was speaking to the Tribunal on Monday as he was outlining his opening arguments. He informed the Tribunal on Monday that Dentons are not calling any witnesses on facts of liability.

Dentons has instructed Richard Coleman KC from Fountain Court. The law firm defence is that it took adequate measures in accordance with the then Money Laundering Regulations 2007, which have now been replaced by the 2017 MLRs, to establish the source of the client’s wealth and funds.

The hearing before Mr B Forde, Mr G Sydenham, Mr C Childs at the SDT is set to run until Wednesday 13 March.

This comes after law firm Clyde & Co was ordered to pay a £500,000 fine back in January by the SDT for failing to comply with anti-money laundering regulations.

The law firm and a former partner admitted to the breaches during a hearing at the Tribunal.