- Publication Date
- 2024-01-18
The Solicitors Regulation Authority (SRA) conducted a forensic investigation at the law firm following concerns relating to compliance with anti-money laundering regulations. A review of client files established that the law firm had not verified the source of funds received from clients in conveyancing matters.
The law firm did not have a AML firm-wide risk assessment in place as required by the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017). The firm's office manual, which contained all the information relating to anti-money laundering risk assessments, only referred to the 2003 money laundering regulations. Furthermore, the law firm did not have any separate money laundering policies in place and had not updated its risk assessment policy since approximately 2003.
It was found that the relevant lawyer, as manager, COLP, and MLCO of the firm: - failed to ensure that the firm had in place a compliant AML firm-wide risk assessment (FWRA) between June 2017 and June 2020 as required by Regulations 18 of the MLRs 2017. - failed to have in place appropriate and risk-sensitive policies and procedures to prevent activities related to money laundering and terrorist financing from December 2007 to June 2017, as required by Regulation 20 of the MLRs 2007. From June 2017 onwards, the firm did not have compliant AML Policies, Controls and Procedures (PCPs) as required by Regulation 19 of the MLRs 2017. - failed to take appropriate measures so that all relevant employees were made aware of the law relating to money laundering and terrorist financing and given regular training from December 2007 to June 2017 as required by Regulation 21 of the MLRs 2007. From June 2017 onwards, the firm did not ensure that relevant employees were made aware of the law and given training as required by Regulation 24 of the MLRs 2017. - did not conduct adequate source of funds checks on any of the client files reviewed by the SRA’s Forensic Investigation Officer and failed to conduct ongoing monitoring of the transactions as required by Regulations 27 and 28(11) of the MLRs 2017. - provided the SRA with inaccurate information by making a declaration on January 2020 that the firm had in place a FWRA as required by Regulation 18 of the MLRs 2017 when this was not true.
The SRA fined the relevant lawyer £14,099.76 for failing to ensure the law firm had relevant documentation, followed appropriate procedures, and conducted adequate source of funds checks when undertaking conveyancing transactions for clients to prevent activities related to money laundering and terrorist financing under the MLRs 2007 and MLRs 2017. The relevant lawyer was also directed to pay costs of £1,350 for providing the SRA with inaccurate information about the AML documentation in place at the firm.