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The UK’s Solicitors Regulation Authority (SRA) is prosecuting Biglaw agency Dentons for its process — or lack thereof — in onboarding a consumer. The consumer — recognized in SRA paperwork as Shopper A — was a financial institution chairman who was ultimately jailed for laundering billions of {dollars} as a part of an embezzlement scheme. In line with the SRA, Dentons’ diligence in taking over Shopper A was missing.
Shopper A’s relationship supervisor was accomplice Francois Chateau. Chateau and his consumer record got here to the Biglaw agency when Dentons mixed with the smaller French regulation agency Salans.
As reported by Roll on Friday, the Tribunal heard that Chateau lashed out at a agency worker in compliance who dared to query Shopper A’s financials:
When a member of Dentons’ threat and compliance crew flagged issues over Shopper A’s plans to purchase a financial institution within the UK, Chateau slammed him in a memo as “untrustworthy” and a “massive prick exhibiting a poor judgement and never understanding what he’s doing”.
And when SRA investigators quizzed Chateau in 2020, he defined to them that it was “not in European tradition” to delve right into a consumer’s funds and “rude” to ask them about their salaries.
Given the authorized issues that will come to plague Shopper A, that memo didn’t age effectively.
The regulatory physique has mentioned the agency’s technique of due diligence was problematic:
The SRA mentioned Chateau’s method to due diligence was the “precise reverse” of what was required and that he “seems to have taken a strikingly hostile method to anybody asking to hold out probably the most elementary compliance checks”.
The regulator additionally described Chateau as “somebody missing in subtlety [and] perception” who didn’t have “respect” for the views of others.
Dentons is defending their course of as in compliance with the suitable regulatory requirements of the time:
“The SRA seems to have felt pushed to argue that the steering issued by the Regulation Society, and authorized by the Treasury, is irrelevant to the query of whether or not the Agency complied with the duty to take enough measures to ascertain Shopper A’s supply of wealth and funds”, Dentons acknowledged in its pleadings.
“That is an unattractive place for the regulator to undertake as a physique required to prosecute responsibly, pretty and within the public curiosity”, the agency mentioned.
The very fact nonetheless stays that, internally, the alarm effectively was rung on Shopper A however ignored. However I assume “massive prick” is seemingly pronounced “fully proper” in French.
Kathryn Rubino is a Senior Editor at Above the Regulation, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are one of the best, so please join along with her. Be at liberty to electronic mail her with any suggestions, questions, or feedback and comply with her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.
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