Christopher Grierson, a leading city litigator on fraud and insolvency, was dismissed last month after agreeing to repay more than £1m within two weeks, after he claimed the sum over a period of four years.
He now faces an investigation by both the Solicitors Regulation Authority (SRA) and the police, after Hogan Lovells reported the case to the regulator and the City of London Police.
Grierson was dismissed after an investigation by Hogan Lovell’s finance team, which started at the beginning of 2011, found evidence of more than £1m in alleged false expenses claims in the four-year period up until the end of 2010.
The SRA will later present the findings of its investigation - likely to take several months - to the solicitors disciplinary tribunal. The tribunal will then decide on a response, which could include disbarment from the profession or a substantial fine.
An SRA spokesperson said: "Hogan Lovells acted promptly in reporting the matter to the SRA. We have launched an investigation and the firm is co-operating fully."
Hogan Lovells is understood to be reviewing its internal control procedures in light of the investigation into Grierson.
A spokesperson for Hogan Lovells said: "Since discovering Christopher's actions our focus has been on promptly investigating and gathering the necessary evidence; being open with partners and our people about what has happened; and notifying the regulator. We have now recovered the money owed to us and have notified the City of London police."
At the time of notifying the SRA last month Hogan Lovells said no clients were affected by Grierson’s actions and that it was "saddened and concerned" by these events.
Grierson had worked on major international cases during his time at the law firm. These included working with Grant Thornton to help creditors recover money from Bernard Madoff’s assets in Europe and advising the Financial Services Authority on the collapse of Lehman Brothers.
He made his reputation after taking on the financial establishment and winning. He forced the Bank of England to hand over key documents in the collapse of the Bank of Credit and Commerce International by suing the central bank.
A spokesperson for City of London Police said: "On June 7 City of London Police arrested a 59 year-old man on suspicion of fraud by false representation. The man is currently on police bail. The investigation was prompted by an allegation of fraud made by Hogan Lovells solicitors."