- Publication Date
- 2023-06-13
The SRA fined the relevant lawyer £3,500 for failing to follow the law firm’s internal anti-money laundering (AML) AML policies, controls, and procedures requiring adequate investigation of the source of funds when acting for clients in two residential conveyancing transactions.
It was found that:
In June 2021 and July 2021, the relevant lawyer acted for clients of the law firm in two separate residential conveyancing matters. The relevant lawyer failed to adequately investigate the clients’ source of funds for their property purchases.
In doing so, the relevant lawyer failed to follow the law firm’s internal AML policies, controls, and procedures in place, which required the investigation of the source of funds as part of the firm’s ongoing monitoring obligations under Regulation 28(11)(a) of the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017.
The relevant lawyer’s conduct was serious by reference to the following factors in the SRA Enforcement Strategy. It showed a wilful disregard of regulatory obligations, there was direct responsibility for the breaches, and the conduct had the potential to cause harm to others.
In determining the financial penalty, regard was had to several factors set out in the SRA’s guidance on the approach to financial penalties published in February 2019 and updated in July 2022. These factors included the intentional nature of the conduct, the potential to cause significant harm, and the need for an amount that would deter future misconduct by the relevant lawyer and others who may engage in similar conduct.
The conduct was placed in conduct band B, which has a financial penalty bracket of between £1,001 and £5,000. The conduct was placed in the mid part of this bracket due to the risk of harm caused. Carrying out adequate source of funds checks is a key measure for limiting opportunities for criminals to use criminal property and protects the public from the risk of firms being used to conduct transactions involving money laundering. The relevant lawyer also showed no remorse or insight into the conduct.
The following mitigating factors were considered:
- The two incidents were isolated and not evidence of a pattern of behavior.
- The relevant lawyer cooperated with the SRA.
- There were no similar issues before or since.
- The relevant lawyer attended refresher training on the firm’s Anti-Money Laundering policies and procedures.
The SRA ordered the relevant lawyer to pay a £3,500 financial penalty.