A prime 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 bought his money.
Dentons overrode an inner warning urging “extreme caution” in coping with him as a consumer and didn’t ask the banker the place his wealth got here from in case it could be “impertinent or impolite,” authorized regulators had alleged at a London court docket. Whereas the tribunal dismissed the case Monday, discovering no breach of the business watchdog’s rules, it did discover proof of shortcomings concerning money-laundering guidelines.
The banker, who can’t be recognized resulting from 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 “adequate measures” to determine the banker’s supply of funds. Attorneys for the agency mentioned it knew that the consumer held a “substantial shareholding” in a state-controlled financial institution.
“We recognize that risk management and regulatory compliance requires constant vigilance and attention and, since the period in question, we have significantly enhanced our capabilities and procedures,” the agency mentioned in a press release.
The regulator’s lawsuit is one in every of only a small variety of circumstances scrutinizing the position {of professional} companies in enabling the circulate 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 the UK yearly.
The banker grew to become a consumer of Dentons in 2013 after an acquisition of a smaller agency, and was instantly recognized as a “politically exposed person” — a time period used to ascribe the next degree 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 primarily based in New York, informed the Solicitors Regulation Authority in an interview that he by no means requested the banker how a lot he earned.
“In Europe, in my culture, we don’t do that. You don’t ask err, how much do you make?” based on Chateau. He mentioned he’d by no means requested anyone to indicate him their checking account and to present proof of what they personal that may be “visible for everybody to see.”
The regulator referred to as Chateau’s solutions “astonishing,” saying that he adopted an “extraordinarily credulous attitude towards individuals of apparently spectacular wealth.”
Dentons, which has places of work all through the world, mentioned the regulator wasn’t concentrating on any people, saying it had accepted that “no one at the firm committed any rule breach, or at least none serious enough to warrant prosecution.”
It mentioned Chateau knew the banker “was a wealthy man who was very successful in finance, that he was known for being opposed to corruption and that he was extremely well connected.” A spokesman declined to touch upon Chateau.
Dentons persevered with preserving the banker as a consumer even after the agency’s normal counsel mentioned in 2014 that it shouldn’t proceed working for him.
Dentons’ attorneys mentioned even when the agency had breached money-laundering guidelines then its conduct wasn’t sufficiently critical to benefit any form of penalty.
The regulator will await a written judgment earlier than deciding on any steps, a spokesman mentioned.
