The Solicitors Regulation Authority (SRA) has decided not to take action against Clifford Chance (CC) following allegations that the magic circle firm overlooked fraud during its investigation into the Royal Bank of Scotland's (RBS) treatment of small companies in 2014.

The allegations centred around CC's report on the bank's global restructuring group (GRG), which was commissioned by RBS following allegations that the group was culpable for "systematic and institutional" poor behaviour in artificially distressing viable UK small and medium-sized businesses.

CC's report for RBS was released in April 2014, and while it found some issues, it did not find evidence of such behaviour, prompting one former GRG customer to complain to the SRA, alleging that the magic circle firm had overlooked a claim of fraud,

Clive May, the owner of a bricklaying business who was one of 138 people interviewed by CC for the 2014 review, described the report as "a whitewash", and said his complaint about the firm had been reopened by the SRA.

Last month the SRA said that it was "likely to investigate", but the regulator has now confirmed that after looking into the details, it has found no evidence that suggests potential misconduct.

An SRA spokesperson said: "We are not investigating and have closed the matter."

The GRG, which closed in 2013, has also been under investigation by the Financial Conduct Authority, which found evidence of serious misconduct.

A CC spokesperson said: "We are fully confident in the quality of our work throughout on this matter, and the conclusions of our report, and are glad to see this reflected in the SRA's decision."