The UK Solicitors Regulation Authority (“SRA”) recently published a settlement agreement that was reached with Steptoe International (UK) LLP (“Steptoe UK”), the London branch of a U.S.-based law firm, to resolve allegations that the firm failed to comply with Russia sanctions by breaching the conditions of a license issued by the Office of Financial Sanctions Implementation (“OFSI”). The SRA reported that it launched an investigation after the firm self-reported a breach of license conditions, and found that multiple breaches of license conditions had occurred in connection with two of the firm’s clients, in violation of Regulation 67(2) of the Russia Regulations. SRA investigators ultimately found that the firm’s non-compliance was largely due to an inadvertent human error by one individual. The firm also reportedly admitted that, by failing to comply with Regulation 67(2), it also breached the SRA Code of Conduct for Firms 2019, which requires firms to “keep up to date with and follow the law and regulation governing the way you work.”
In the settlement, Steptoe UK agreed to pay £600 to cover the costs of the investigation, consented to the publication of the agreement, and received a written rebuke from the SRA. The SRA considered a written rebuke to be appropriate for several reasons, including the low risk of reoccurrence due to the policies and processes in place at the firm and the lack of significant harm to consumers or third parties due to breaches that were primarily the result of administrative and human error. The SRA also felt that it was appropriate to publish the settlement “in the interests of transparency in the regulatory and disciplinary process.”