Are AML breaches misconduct? High Court hears SRA appeal


Dentons: Appeal heard today

A significant appeal that should decide whether a breach of the Money Laundering Regulations is also a breach of the SRA code of conduct starts in the High Court today.

Mrs Justice Lang is hearing the Solicitors Regulation Authority’s (SRA) appeal against the decision of the Solicitors Disciplinary Tribunal (SDT) that global giant Dentons’ breach of the regulations was “inadvertent” and did not amount to professional misconduct.

The world’s largest law firm’s defence was that it relied on what it was told by the relationship partner who had brought the client, a politically exposed person, over from Salans when it merged with Dentons in 2013.

The tribunal said: “It was plain that the breach was not systemic, indeed, the firm had been commended by the SRA for its AML systems and controls.”

It decided that the breach fell within “the small category of cases where wrongdoing did not amount to professional misconduct”.

The SRA had argued that Dentons breached both SRA principles and the specific requirement to “comply with legislation applicable to your business, including anti-money laundering and data protection legislation”.

Among the grounds of the appeal are that the tribunal misdirected itself in finding that a breach of the legislation was not misconduct.

After the SDT’s ruling was published, Dentons said: “The SRA’s own guidance to the profession is that there may be breaches of the MLRs that are not sufficiently serious to warrant disciplinary action.

“We are pleased that the SDT found that any breach of the MLRs had been inadvertent, did not amount to professional misconduct and that there had been no breach of the principles or code. The SDT also recognised that we not only had relevant and responsible AML policies in place, but that we enforced those policies.

“We recognise that risk management and regulatory compliance requires constant vigilance and attention and, since the period in question, we have significantly enhanced our capabilities and procedures.

“We have co-operated with the SRA throughout its investigation and remain committed to upholding the highest standards of professional conduct.”




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