A US-based international firm with an office in London’s Square Mile has been fined £300,000 for historical breaches of anti-money laundering rules.
Simpson Thacher & Bartlett was due to face a three-day substantive hearing at the Solicitors Disciplinary Tribunal yesterday. At the beginning of the first day of the hearing, James Counsell KC, for the SRA, and Patricia Robertson KC, for the firm, made an application for the three-person panel to approve an agreed outcome.
The firm was alleged to have failed to have, in compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, to carry out a firm-wide risk assessment between June 2017 and March 2020, and, between June 2017 and January 2023, failed to have in place fully compliant policies, controls or procedures.
It was also alleged to have, between June 2017 and October 2022, failed to have in place compliant client and/or matter risk assessments in relation to four files.
The penalty was agreed between the firm and the SRA, last Friday. Robertson said: ‘The respondent made prompt admissions a year ago in response to the SRA notice and repeated those admissions in our answer. [The firm] invited engagement of the SRA to agree the outcome and sanction. The respondent is not at fault as regard to the fact the agreed outcome was only concluded on 7 March. We do appreciate it will have taken the SRA some time to consider the answer but the reality is the answer repeated the response sent a year ago. We simply say we were not responsible for the delay.’
Read more
The tribunal said that the agreed outcome was outside the 28-day deadline which was ‘unhelpful and disappointing’. Chair Edward Nally said ‘rules are there for a purpose’ but the tribunal agreed to consider the outcome.
After retiring, the chair said: ‘We have considered the agreed outcome document that has been presented jointly by the parties. We have decided we will accept the agreed outcome. We agree the sanction is proportionate [and] takes into consideration the different aspects, the seriousness of the misconduct and the fiscal size of financial resources. The misconduct admitted and found proved is categorised in the more serious category.’
The chair said the firm was ‘well resourced…with a global reputation’ and the fine was an ‘appropriate sanction’. The level of the fine ‘needs to be meaningful to be a deterrent in a wider context’, he added.
The tribunal said there was ‘no evidence any actual harm being caused by any of the failings accepted’ and the risk of harm by the breaches was ‘also low’. The misconduct ‘did continue over a period of time’, it added.
The tribunal ordered, as per the agreed outcome, that Simpson Thacher & Bartlett be fined £300,000 and pay £62,000 costs.
Simpson Thacher & Bartlett said: ‘We are pleased that the tribunal has accepted the resolution agreed with the SRA in respect of this matter. The London office of Simpson Thacher & Bartlett LLP acknowledges and regrets certain historic shortcomings in some of our UK AML written policies and procedures and has made significant investments to enhance our robust compliance function.’
No comments yet