London firm Mishcon de Reya must pay £232,500 because of several breaches of money-laundering rules, the Solicitors Regulation Authority (SRA) has said.

The firm is also to list on the London stock exchange after partners voted to go public last year.

The firm was found to have failed to secure adequate due diligence on four related clients and also of misplacing relevant documents.

Mishcon de Reya accepted that inadequate training was provided for the partner dealing with Anti Money Laundering (AML) compliance, despite this being mandatory.

Improperly transferred

The firm also accepted that funds were improperly transferred from a client ledger to discharge fees and disbursements.

The SRA said the penalty should be 0.25% of the firm’s £155m turnover – or £387,500. This sum was reduced by 40% to take account of mitigating factors.

The SRA has found that Mishcon de Reya carried out work for two individual clients and corporate vehicles connected with them between September 2015 and April 2017.

This work related to a regulatory investigation, asset planning for one of the individuals and initial stages of a proposed acquisition.

Due diligence for the two individuals was done but the firm did not have a hard copy file, which was misplaced, and no electronic copy of the records was kept.

Both acquisitions, involving companies in high-risk jurisdictions, risked money laundering or terrorist financing, the SRA said.

Payments were made in and out of the client account that did not relate to an underlying legal transaction.

Bill of costs 

The firm also did not send a bill of costs or other written notification of the costs incurred.

Mishcon de Reya cooperated with the SRA probe and acknowledged its due diligence and training failings.

Different IT systems have been introduced with centralised record-keeping to prevent future similar breaches.

The SRA accepted there was no evidence of lasting harm and a low risk of repetition, but said the sanction must be a deterrent to others.

Mishcon de Reya also agreed to pay the SRA’s £50,000 costs.