A City firm has accepted a rebuke after allowing its client account to be used as a banking facility.
Womble Bond Dickinson (UK) LLP said the issue had arisen after a now former partner in the top 20 firm set up bank accounts outside its central finance function.
By making a regulatory settlement agreement with the Solicitors Regulation Authority, the decision to refer the firm’s conduct to the Solicitors Disciplinary tribunal in November was therefore overturned.
The firm had accepted instructions to act for a corporate client in relation to a commercial scheme under which it held funds which were deposited by three individual clients of that client. These three were not clients of Womble Bond Dickinson.
Following a self-report by the firm, and with its full cooperation, the SRA investigation identified that it allowed payment to be made from monies held on behalf of the corporate client, where there was no underlying transaction or service. These two payments were worth around £2.5m in total.
Womble Bond Dickinson admitted these payments were allowed from monies held other than for instructions relating to a service provided. In doing so it provided banking facilities in breach of SRA accounts rules.
As well as noting the part played by the former partner, the firm stressed that as soon as the issue emerged it self-reported to the SRA. The firm’s culpability for this issue was reflected by the fact that it was agreed with the regulator that it should receive a rebuke, which is the lowest sanction available.
Womble Bond Dickinson agreed to pay £3,840 in costs.