A firm manager has been fined £32,500 and ordered to pay costs of £50,000 following a series of regulatory breaches while acting for a politically exposed person (PEP).
Three of five allegations made by the Solicitors Regulatory Authority (SRA) against Rory Peter Heddle Fordyce – who has also been subjected to restrictions on employment and practise – were found to have been proven at a Solicitors Disciplinary Tribunal.
The allegations centred on the source of wealth and funds of Anar Mahmudov, a client of Taylor Fordyce Limited (of which Fordyce was manager, director and compliance officer for legal practice and anti-money laundering) and son of the former national security minister of Azerbaijan.
Allegations that Fordyce failed to take adequate measures to establish the source of just over £3 million received from Mahmudov, used the firm’s client account as a banking facility in relation to £1.1 million of the funds received, and used the firm’s client account for his own personal payments were all found to have been proven in their entirety.
The SRA submitted that it was common ground that Mahmudov was a PEP for the purposes of the Money Laundering Regulations, as both the son of Azerbaijan’s national security minister and the husband of the daughter of the former chairman of the International Bank of Azerbaijan, who had subsequently received a conviction for fraud.
The risk assessment Fordyce had undertaken was found to be inadequate, with the tribunal noting that he had relied on a self-certified document from Mahmudov in relation to the source of wealth and source of funds without undertaking his own enquiries.
When Fordyce enquired about a payment of £1.9 million received from Mahmudov, he was informed the funds were from loan repayments, an answer he accepted without seeking further information and which was subsequently found to be untrue. In doing so, the tribunal found he had prioritised the transaction over his regulatory obligations and said the steps taken were ‘rudimentary, piecemeal and naïve’.
An allegation that Fordyce used the firm’s client account as a banking facility in relation to £1.1 million received from Mahmudov was also found to be proved, with the tribunal finding no legal transactions to justify the use of the client account. Fordyce also admitted a third allegation that he had used the firm’s client account as a banking facility for his own personal payments.
The tribunal determined that whilst Mr Fordyce was not motivated by direct personal gain to commit misconduct, his misconduct arose as a result of his prioritising expediency and convenience over compliance with his regulatory obligations.
The judgment noted:
“As a solicitor, Mr Fordyce was trusted to comply with his regulatory obligations – he failed to do so in circumstances where he was an experienced solicitor and was wholly responsible for the circumstances giving rise to the misconduct… The misconduct was aggravated by its deliberate and repeated nature that took place over a period of time. Mr Fordyce had mishandled significant amounts of money both in relation to Mr Mahmudov as well as his own personal financial affairs.”
The tribunal accepted Fordyce had shown a degree of insight into his misconduct and had undertaken training in relation to money laundering regulations. However, given the sums involved and period of time over which the misconduct had taken place, the matter was found to be ‘very serious’ and a fine of £32,500 deemed appropriate and proportionate. He was also ordered to pay costs of £50,000.
The seriousness of the failings were also found to warrant restrictions on Fordyce’s ability to practise or act as a signatory on any client account.
