Locke Lord has received a record £500,000 fine from the Solicitors Disciplinary Tribunal (SDT), after admitting that it failed to prevent a former London partner from using a client account for "dubious" financial arrangements.

The penalty is double the previous record SDT fine of £250,000 handed out to White & Case earlier this year for conflict and confidentiality failures.

Locke Lord admitted four failings related to its supervision of former partner Jonathan Denton – who left the firm in October 2015 – including that it had failed to prevent him from "using the firm's client account in transactions that bore the hallmarks of dubious financial arrangements or investment schemes".

The US firm also admitted it failed to have effective systems and controls in place to identify and assess potential conflicts of interest, and that it had failed to prevent Denton from directing payments in and out of the firm's client account which were "not related to an underlying legal transaction or a service forming part of the firm's normal regulated activities".

Denton has been referred to the SDT after denying the allegations levelled at him. The SRA also claims that he misled third parties by producing false invoices and knowingly made statements that he knew to be untrue. The allegations are subject to a hearing before the SDT.

Locke Lord launched in London in 2011, following the hire of a seven-partner team from Salans. Denton, who joined the firm the following year from an in-house role at private lender Berkeley House Investments, is a financial services and banking specialist, and is also a former partner at Mishcon de Reya, Salans and Wragge & Co.

A Locke Lord spokesperson said: "The matters investigated by the SRA concern the actions of Jonathan Denton and relate only to clients for whom he worked. None of the firm's other clients were affected by Denton's actions. We regret what has happened, but we are pleased to note that the SRA accepted our position that the firm and its senior officers did not act dishonestly or with conscious impropriety, or turn a blind eye to Denton's conduct.

"After Denton's departure from the firm – effective October 2015 – and in consideration of matters that came to light, steps were taken to review existing practices and procedure. A number of changes and improvements were made. We remain committed to ensuring that we are at the forefront of best practice, that we uphold the legal profession's high standards, and that this situation does not arise again."

A Solicitors Regulation Authority spokesperson added: "The firm recognises the seriousness of the issues and has worked constructively with us to ensure proper public protection."

White & Case's £250,000 fine – previously the largest ever made by the SDT against a single firm – related to a 2014 High Court case that saw the firm blocked from acting for Ukrainian client Victor Pinchuk after it failed to identify a conflict of interest.

The SDT ruled that the actions of partner David Goldberg – who was fined £50,000 and ordered to pay costs of £12,500 – had "caused harm to the reputation of the profession in an area of international business".