SDT decisions and SRA interventions
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Clyde & Co LLP and Edward Henry Mills-Webb
Application 12481-2023
Hearing 9-11 January 2024
Reasons 8 February 2024
The SDT ordered that the first respondent should pay a fine of £500,000, and that the second respondent should pay a fine of £11,900.
The parties had submitted a statement of agreed facts and admissions, and the SDT had been invited to proceed on the basis of those admissions.
In relation to the relevant transactions, the first respondent had: (i) failed to carry out adequate customer due diligence (CDD) measures on company A, contrary to regulations 5 and 7 of the Money Laundering Regulations 2007; (ii) failed to carry out adequate ongoing monitoring of company A, contrary to regulation 8 of the 2007 MLRs (transactions 2-11) and regulation 28(11) of the 2017 MLRs (transactions 12-14); (iii) failed to carry out any or adequate CDD on the principals in transactions 1-11, contrary to regulations 5 and 7 of the 2007 MLRs; (iv) failed to carry out any or adequate CDD on the principals in transactions 12-14, contrary to regulations 27 and 28 of the 2017 MLRs; and (v) either more CDD material should have been obtained for the principals, or the relevant transactions ought to have ceased under (a) regulation 11 of the 2007 MLRs in relation to transactions 1-11 and (b) under regulation 31 of the 2017 MLRs in relation to transactions 12-14. By reason of such failures, the first respondent admitted that it had breached principles 6, 7 and 8 of the SRA Principles 2011 and had failed to achieve outcomes 7.3 and 7.5 of the SRA Code of Conduct 2011.
The second respondent admitted that in relation to the relevant transactions, he had: (i) materially contributed to the first respondent’s failure to carry out adequate CDD on company A, contrary to regulations 5 and 7 of the 2007 MLRs; (ii) he had materially contributed to the first respondent’s failure to take adequate steps to check what ongoing monitoring of company A was in fact being carried out, contrary to regulation 8 of the 2007 MLRs in transactions 2-11 and regulation 28(11) of the 2017 MLRs in transactions 12-14; (iii) he had materially contributed to the first respondent’s failure to carry out any or adequate CDD on the principals in transactions 1-11, contrary to regulations 5 and 7 of the 2007 MLRs; (iv) he had materially contributed to the first respondent’s failure to carry out any or adequate CDD on the principals in transactions 12-14, contrary to regulations 27 and 28 of the 2017 MLRs; and (v) either more CDD material should have been obtained for the principals, or the relevant transactions ought to have ceased under (a) regulation 11 of the 2007 MLRs in relation to transactions 1-11; and (b) under regulation 31 of the 2017 MLRs in relation to transactions 12-14. By reason of the above, the second respondent admitted that he had breached principles 6, 7 and 8 and failed to achieve outcomes 7.3 and 7.5 of the code.
The SDT was satisfied that those admissions had been properly made, based on the evidence before it and had found the matters proved on the balance of probabilities in respect of both respondents.
The first respondent’s level of culpability was high. The misconduct was aggravated by the fact it was repeated and included missed opportunities to correct earlier errors.
The first respondent had initially sought to blame the second respondent for the entirety of the failings. Clearly, in the light of his own admissions, some of that blame was justified. However, it had failed to reflect on its own role until a late stage and had not focused enough attention on its own weaknesses in procedures and policies.
The matter was also significantly aggravated by the fact that the first respondent had a previous finding at the SDT related to failures to comply with money laundering regulations. Despite that finding, the firm had not, at the material time, put adequate and robust measures in place.
The seriousness of the misconduct was such that the appropriate sanction was a financial penalty. The misconduct had not been deliberate or caused by any blameworthy motivation. There had been no lack of integrity, recklessness, or manifest incompetence but the first respondent was a global firm with a previous matter before the SDT. The notional starting point of the fine was £50,000 and the appropriate uplift for the firm was 1,000%, making a total fine of £500,000.
No blameworthy motivation had been found in assessing the second respondent’s mistakes which had also arisen out of carelessness on his part and not from any planning. He was a partner and head of department. By reason of those roles, he shared the responsibility with the first respondent for ensuring that there were no breaches. The potential for harm was the possibility that money laundering could have occurred.
The misconduct was aggravated by the fact that it was repeated, and it was mitigated by the second respondent’s genuine and complete insight. The seriousness of the misconduct was such that the appropriate sanction was a financial penalty.
The overall delay to the resolution of the matters was not justified and had caused stress, anxiety and potential career limitation to the second respondent. It was appropriate to reduce the fine by 15% to reflect that, making a total of £11,900.
The first respondent was ordered to pay costs of £128,197; the second respondent to pay costs of £54,942.
Charles Hill & Co Solicitors
On 12 March 2024, the SRA intervened into the recognised sole practice of Charles Ogbonna Azotam, Charles Hill & Co Solicitors. The firm had one office at 7-13 Camberwell Road, London SE5 0EZ.
The ground of intervention was: there was reason to suspect dishonesty on the part of Azotam in connection with his practice as a solicitor – paragraph 1(1)(a)(i) of Schedule 1 Part I to the Solicitors Act 1974.
John Owen of Gordons LLP, 1 New Augustus Street, Bradford BD1 5LL (email: intervention@gordonsllp.com; tel: 0113 227 0395) has been appointed as the intervention agent.
Azotam’s practising certificate is immediately suspended as a result of the intervention.
On 12 March 2024, an adjudicator resolved to intervene into the above-named sole practice of Beresford Holding-Parsons who died on 18 December 2023. Holding-Parsons was formerly at Suite 010, Hurlingham Studios, Ranelagh Gardens, London SW6 3PA.
The ground of intervention was: it was necessary to intervene to protect the interests of clients or former clients of the firm – paragraph 1(1)(m) of Schedule 1 to the Solicitors Act 1974 (as amended).
Chris Evans of Lester Aldridge LLP, Russell House, Oxford Road, Bournemouth BH8 8EX (email: interventions@LA-Law.com; tel: 01202 786341) has been appointed to act as the intervention agent.
The intervention notices were served on 13 March.