Mishcon de Reya and ex partner face prosecution by solicitors regulator over sports clients money
Mishcon de Reya and its former head of sport are being prosecuted by a legal regulator for how the prestigious city law firm handled money for some of its sports clients.
Both Elizabeth Ellen, who stepped down as a partner at Mishcon to set up a sports consultancy last year, and the law firm would both face a lawyers’ disciplinary tribunal hearing in due course, the Solicitors Regulation Authority (SRA) said yesterday.
The case concerns the treatment of some of the law firm’s sports agent clients, who were allowed to route commissions paid to them through Mishcon, according to the Financial Times.
According to regulatory rules, all funds passing through law firm accounts must relate to an underlying legal service.
The case against Mishcon is for alleged “failure to take any or adequate steps to prevent payments to be made into and from the firm’s client account in circumstances amounting to the provision of a banking facility”, the SRA said.
Separately, the former partner Ellen had a “case to answer” over claims that payments were made to and from the firm’s client account “in circumstances amounting to the provision of a banking facility”, the regulator said.
Mishcon said the claim against its former employee was connected to “technical breaches” in 2011.
The SRA said the allegations are subject to a hearing before the Solicitors Disciplinary Tribunal and are yet unproven. The regulator said it could not comment further on the matter until it is heard at tribunal.
Mishcon said: “We note that a referral has been made to the Solicitors Disciplinary Tribunal (SDT) following an investigation into a historical matter which we self-reported to the Solicitors Regulation Authority.”
The law firm said it will “continue to cooperate fully with all regulatory authorities.”
The news follows another investigation into Mishcon by the SRA, triggered by a 2017 High Court ruling on an HM Revenue & Customs probe of Newcastle United football club, first reported by the Guardian.
While Mishcon was not a party to the case, HMRC alleged that the firm had been the medium for the bulk of a £1.9m fee that Newcastle paid to a sports agent involved in negotiations in 2011 to transfer footballer Demba Ba.
The funds were moved through Mishcon to several other parties, including companies associated with Ba and other sports agents, according to HMRC.
Boasting some of the world’s wealthiest families as its clients, the elite legal firm’s equity partners were paid over £1m each on average last year.
Mishcon also announced its intention to float on the London Stock Exchange in April this year.
The IPO, the firm said, would enable to firm to accelerate its expansion as it aims to establish market-leading position in areas such as complex litigation.