- Publication Date
- 2024-01-18
The Solicitors Regulation Authority (SRA) initiated a forensic investigation into a law firm following concerns related to compliance with anti-money laundering regulations. The review uncovered that the firm had not verified the source of funds received from clients in conveyancing transactions. It was revealed that the firm lacked a firm-wide risk assessment as mandated by the relevant regulations, and the office manual only referenced outdated money laundering regulations from 2003.
The SRA found that the relevant lawyer, serving as a manager and compliance officer, failed to ensure that the firm was adhering to necessary compliance guidelines between June 2017 and June 2020. The firm did not maintain appropriate and risk-sensitive policies to prevent money laundering activities during the specified period, nor did they update anti-money laundering policies in line with the regulations from 2017 onwards. Additionally, the firm neglected to conduct adequate source of funds checks on client files, a requirement under the regulations.
The SRA found the lawyer culpable for providing inaccurate information during the regulatory investigation, specifically regarding the firm's risk assessment compliance. This non-compliance represented a pattern of misconduct that lasted longer than reasonable and exposed the firm to financial crime risks, though no such crimes were proved to have occurred.
The audit process by the SRA eventually led to a financial penalty, indicative of the gravity of these lapses in compliance and the need for the law firm to rectify the outlined deficiencies to prevent future risks related to money laundering and terrorist financing. The lawyer involved is no longer in a compliance role at their current employment.