SRA v Dentons by

Case Summary

s5606950_1 — 2025-10-07 12:31:17 UTC

Dentons take over London office of another firm and acquired clients, one of them being 'Client A'. In 2016, 'Client A' was sentenced to 15 years' imprisonment for embezzlement. Two years later in 2018 an 'unexplained wealth order" was granted for 'Client A's wife. Dentons realised this client was 'politically exposed' and a high risk person for money laundering. According to an 'Intelligence Briefing Note' obtained by Dentons it was unlikely the client did not benefit from the $1 billion. Client partner disagreed. SDT took the view that Dentons had not been permitted to rely solely on client partner's assessment that 'Client A's wealth had derived from a shareholding in the Bank without seeking evidence. It had breached Regulation 14 of 2007 MLRs. SDT went on to find that such an error did not amount to a breach of Principle 7 of the 2011 Principles (which required a solicitors' firm to "comply with its legal and regulatory obligations) or outcome 7.5. The reason being because Principle 7 did not impose strict liability.

Appeal Judgment

s5606950_1 — 2025-10-07 12:40:54 UTC

In the first hearing it was held that Dentons did not breach any money laundering regulations under the SRA Code of Conduct due to the breach falling 'within the small category of cases where wrongdoing did not amount to professional misconduct' meaning that it was thought to not be serious enough to be treated as breach of conduct.

However, in the appeal the judge agreed with the SRA's initial claim against Dentons, saying that breaches of the code of conduct can only be established where 'the requirements of seriousness, culpability and reprehensible conduct are met' meaning that even though initially the breach was thought to not be misconduct, it is now to be a breach of the code of conduct due to money laundering. The judge stated that if she were to impose a threshold requirement of seriousness, she would be 'rewriting the conduct rules'.

Our Judgment

s5606950_1 — 2025-10-07 12:44:49 UTC

We would advise that if it is ambiguous whether or not a client has a 'high risk' of money laundering, we would advise to listen to evidence presented for or against this proposal in order to prove whether or not the client that services are being provided to is in fact guilty. It would also be recommended to listen to advice given regarding the client from notes and not dismiss any ideas presented to the firm by legitimate parties that would support evidence of money laundering, to avoid a breach of code of conduct (Principle 7) of supporting a client who does have a 'high risk' of money laundering.