Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.
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1). Revelation of ‘excessive further information’ to delay FCA investigation of HBOS
Evidence delaying the Financial Conduct Authority’s (FCA) investigation into the collapsed lender HBOS has been revealed, further stalling the regulator’s investigation into the firm and its senior management.
“We have had contact from a representative of a party to suggest that there may be extensive further information which had been privately held,” Andrew Bailey, the chief executive of the FCA, told the Treasury select committee on Wednesday.
This is despite a related police investigation into a fraud at the bank’s Reading branch that led to the conviction of six people, and a £500m shareholder lawsuit over the government-mandated takeover of HBOS by Lloyds Banking Group.
No further information was given about the nature of the evidence, or who had previously held it.
The FCA announced in early 2016 that it would launch a fresh investigation into the former senior management of HBOS, after a stinging review that criticised the previous regulatory response as inadequate. The watchdog is looking at the former executives’ role in the collapse, and also what they knew about the fraud in the Reading branch, which “ripped apart small businesses”.
The National Crime Agency announced in April that it too would launch an investigation into related HBOS allegations, adding another probe to examine the circumstances of the lender’s £25bn collapse in 2008.
In another case looking at how small businesses were treated, the FCA expects to finish its investigation into Royal Bank of Scotland’s Global Restructuring Group (GRG) by the end of July. The GRG has been at the centre of public and political scandal following allegations of how it treated small-business customers in the wake of the financial crisis.
2). DWF prepares for largest law firm listing yet
Priming itself to be the sixth law firm to float, Manchester-headquartered DWF could mark history as it announces today the potential of a £1 billion valuation.
Law firm IPOs have certainly become a trend over the last few years, and DWF’s announcement considering the possibility of listing on the London Stock Exchange (LSE) confirms the benefits of the growing shift to alternative structures.
A practice made up of 1,200 lawyers, including 70 equity partners, and posting 2016/17 revenues of £199.3m, DWF would be the largest law firm to float by some distance. It would also be the most global, as the firm has recently focused on expansions into multiple geographies, including Europe, North America and Asia-Pacific.
Law firm IPO history
The first ever law firm listing took place in 2007 by Slater & Gordon, with Gateley floating on London AIM market in June 2015. In 2017, two further firms announced their intentions to go public, as Gordon Dadds and Keystone Law both joined the LSE on in August and November respectively. The most recent IPO was made by Rosenblatt, whose first day of trading began last month.
For firms sitting at a mid-market level, looking for innovative ways to differentiate themselves, IPOs could prove a lucrative option. We previously assessed both the benefits and risks of a law firm listing, click here to find out more.
3). Movers & Shakers
Andy Philips departs his role as North West head of private equity at Eversheds Sutherlands to join DLA Piper in Manchester
Paul Hastings has hired Arun Srivastava as a partner and head of the regulatory, fintech and payments practice in London. He joins from Baker McKenzie where he served as the firm’s head of financial services
Former head of Dentons’ Beijing office Sarah Zeng has left to join Orrick, Herrington & Sutcliffe in the firm’s Asia M&A and private equity practice
Mergers & Alliances