A high legislation agency confronted allegations that it broke UK money-laundering guidelines by being too well mannered to ask a politically linked banker from a former Soviet republic how he received his money.
Dentons overrode an inner warning urging “excessive warning” in coping with him as a shopper and did not ask the banker the place his wealth got here from in case it is likely to be “impertinent or rude,” authorized regulators had alleged at a London court docket. Whereas the tribunal dismissed the case Monday, discovering no breach of the trade watchdog’s ideas, it did discover proof of shortcomings concerning money-laundering guidelines.
The banker, who can’t be recognized as a result of a court docket order, had spent tens of thousands and thousands of kilos on London property and a member of the family is now the topic of a separate police probe. Dentons fought the case on the tribunal, arguing that it took “enough measures” to ascertain the banker’s supply of funds. Attorneys for the agency stated it knew that the shopper held a “substantial shareholding” in a state-controlled financial institution.
“We acknowledge that threat administration and regulatory compliance requires fixed vigilance and a focus and, because the interval in query, we’ve got considerably enhanced our capabilities and procedures,” the agency stated in an announcement.
The regulator’s lawsuit is one among only a small variety of circumstances scrutinizing the position {of professional} companies in enabling the move of illicit finance into Britain. Few circumstances go to trial within the UK regardless of the police estimating that a whole bunch of billions of kilos are laundered by way of the UK yearly.
The banker grew to become a shopper of Dentons in 2013 after an acquisition of a smaller agency, and was instantly recognized as a “politically uncovered particular person” — a time period used to ascribe a better stage of threat and one which places the onus on the agency to scrutinize transactions. However Dentons by no means requested the banker for his wage or the the dimensions of his shareholding within the financial institution.
Dentons lawyer Francois Chateau, now based mostly in New York, advised the Solicitors Regulation Authority in an interview that he by no means requested the banker how a lot he earned.
“In Europe, in my tradition, we don’t try this. You don’t ask err, how a lot do you make?” in line with Chateau. He stated he’d by no means requested anyone to indicate him their checking account and to present proof of what they personal that may be “seen for everyone to see.”
The regulator referred to as Chateau’s solutions “astonishing,” saying that he adopted an “terribly credulous perspective in direction of people of apparently spectacular wealth.”
Dentons, which has places of work all through the world, stated the regulator wasn’t concentrating on any people, saying it had accepted that “nobody on the agency dedicated any rule breach, or a minimum of none critical sufficient to warrant prosecution.”
It stated Chateau knew the banker “was a rich man who was very profitable in finance, that he was identified for being against corruption and that he was extraordinarily effectively linked.” A spokesman declined to touch upon Chateau.
Dentons persevered with retaining the banker as a shopper even after the agency’s basic counsel stated in 2014 that it shouldn’t proceed working for him.
Dentons’ attorneys stated even when the agency had breached money-laundering guidelines then its conduct wasn’t sufficiently critical to benefit any sort of penalty.
The regulator will await a written judgment earlier than deciding on any steps, a spokesman stated.
