- Publication Date
- 2024-05-23
In April 2023, the SRA commenced a forensic investigation into the law firm. In January 2024, a forensic investigation officer prepared a report identifying concerns surrounding the use of the firm's client account and its compliance with the MLRs 2017.
It was found that between March 2023 and April 2023, the law firm allowed and/or failed to prevent its client account from being used to provide a banking facility for matters other than payments, transfers, or withdrawals in respect of the delivery of regulated services.
Between June 2017 and February 2024, the law firm failed to have in place an appropriate AML firm-wide risk assessment that identified and assessed the risks of money laundering to which its business was subject, taking into account all risk factors pursuant to Regulation 18(2) of the MLRs 2017. Since June 2017, the law firm failed to establish and maintain fully compliant policies, controls, and procedures to mitigate and effectively manage the risks of money laundering and terrorist financing identified in any risk assessment, pursuant to Regulation 19(1)(a) of the MLRs 2017, and regularly review and update them pursuant to Regulation 19(1)(b) of the MLRs 2017.
Between June 2017 and March 2024, the law firm failed to have in place a process to sufficiently assess the level of risk, as required by Regulation 28(12)(a)(ii) and Regulation 28(13) of the MLRs 2017. The law firm was unable to demonstrate that the extent of the measures it had taken to satisfy the requirements of Regulation 28 were appropriate, as required by Regulation 28(16) of the MLRs 2017.
The firm was directed to pay a financial penalty of £1,520 and ordered to pay costs of £1,350.
The firm's conduct was placed in conduct band C which has a financial penalty of 1.6% to 3.2% of annual domestic turnover. The firm's conduct was placed in the mid-range of this band at C3 (2.4% of annual domestic turnover).
The firm's conduct was serious, and the breaches persisted for longer than necessary. The firm had made considerable improvements to its AML policies but was still not fully compliant. The firm had allowed its client account to be used as a banking facility for a short period of time. The law firm had taken steps to remedy the harm. There was no evidence that actual harm had materialised. The firm had made admissions to the SRA about its conduct and had co-operated with the investigation.