- Publication Date
- 2024-01-22
The Solicitors Regulation Authority (SRA) conducted an audit on a law firm, which is a recognized body. It was discovered that the firm had been non-compliant with several requirements, resulting in disciplinary action. The firm was found to have failed in maintaining a documented and compliant AML firm-wide risk assessment (FWRA) and/or compliant policies, controls, and procedures (PCPs) as per the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017). This non-compliance occurred between June 2017 and October 2023.
Additionally, it was found that the firm had made an inaccurate declaration to the SRA regarding its FWRA on October 2020. The firm declared that its FWRA met the requirements of Regulation 18 of the MLRs 2017, despite not having one in place. Further investigation into four files from November 2022 to February 2023 revealed failures in conducting adequate client/matter risk assessments and source of funds checks.
As a result of these findings, the SRA imposed a financial penalty of £4,240.57 on the firm. The firm was also found to be in breach of its legal and regulatory obligations for more than six years. The SRA noted that the firm’s conduct was serious, had the potential to harm public interest, and could undermine public confidence in the legal profession.
The firm’s conduct was categorized in Conduct Band C, which includes a penalty range of 1.6% to 3.2% of annual domestic turnover. The firm was placed at the upper end of this range due to the severity and duration of the misconduct, as well as other aggravating factors such as multiple breaches and the lengthy period of non-compliance. Although the firm had recently taken steps to rectify the issues, the SRA found that the firm had not acted promptly enough in addressing the breaches.
In conclusion, the SRA took decisive action to address and penalize the firm's compliance failures to uphold regulatory standards and maintain public trust in the legal profession.