The London branch of a prominent US law firm is set to appear before the Solicitors Disciplinary Tribunal (SDT) over allegations concerning significant breaches in its anti-money laundering (AML) protocols.
The charges, which have been described as ‘historic’ by the firm, highlight apparent failures in the firm’s compliance with the 2017 Money Laundering Regulations. The Solicitors Regulation Authority (SRA) has decided to move forward with proceedings, a decision that has disappointed the firm, Simpson Thacher & Bartlett, who asserts these allegations refer to past occurrences.
Unlike other cases where fines were issued by the SRA without tribunal involvement, this step suggests the gravity of the firm’s alleged non-compliance warrants a more severe penalty than the £25,000 maximum fine the SRA can impose. This might be attributed to the firm’s significant turnover. For instance, a Manchester property law firm recently faced a fine nearing £22,000 due to similar compliance issues, which represented 2.4% of its turnover.
Specifically, Simpson Thacher is accused of not having a comprehensive firm-wide risk assessment from June 2017 to March 2020 and failing to maintain a ‘fully compliant’ one thereafter. Additionally, accusations include the absence of complete policies, controls, or procedures from June 2017 to January 2023, alongside non-compliant client or matter risk assessments concerning four specific files between June 2017 and October 2022. Yet, these allegations are still to be substantiated.
A spokesperson for Simpson Thacher stated their disappointment with the SRA’s decision to proceed, emphasising that no actual money laundering transpired, nor was there any harm to clients or third parties related to these alleged deficiencies. The firm maintained that it cooperated fully with the SRA throughout its investigation and expressed confidence in their current compliance operations. Nevertheless, the firm declined further comments due to the ongoing proceedings.
The tribunal hearing represents a critical moment for Simpson Thacher & Bartlett as the legal industry closely watches the outcomes of the alleged anti-money laundering compliance failures.
