- Publication Date
- 2023-01-04
The Solicitors Regulation Authority (SRA) conducted an audit of the law firm following a proactive Anti-Money Laundering (AML) inspection. The investigation identified several areas of concern regarding the firm's compliance with relevant regulations. The firm did not have a compliant AML practice-wide risk assessment as required by Regulation 18 of the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017 (MLRs 2017) until November 2020 and made an incorrect declaration in October 2020 claiming compliance.
The firm failed to assess key risk areas, including its customers, the geographical areas of operation, the provided products or services, the delivery method of these services, and the transactions conducted. Around 60% of the firm’s fee income, deriving from conveyancing and controlling client money, was not properly addressed in the risk assessment. The risk assessment did not sufficiently consider the Legal Sector Affinity Group guidance, sectoral AML risk assessment, or the SRA's warning notice.
From June 2017 to November 2019, the firm failed to maintain the trust the public expects in legal services, comply with legal and regulatory obligations, and carry out business effectively with proper governance and risk management principles. In November 2019, new standards came into force, and the firm continued to fail in upholding public trust, complying with regulatory and legislative requirements, and keeping updated with applicable laws and regulations .
A financial penalty of £2,000 was agreed upon, along with the payment of £600 for the investigation costs. The firm assisted the SRA throughout the investigation, admitted the breaches, and showed remorse for its actions. There was no evidence of harm to consumers or third parties, and the risk of repetition has been reduced.