- Publication Date
- 2024-04-25
The SRA conducted a forensic investigation into a law firm in January 2023. This investigation revealed several issues with the firm’s anti-money laundering (AML) policies and a failure to obtain two accountant’s reports at the end of the financial years 2021 and 2022. Issues with the firm’s regular client account reconciliations were also identified.
From June 2017 to April 2019, the law firm failed to have in place an adequate firm-wide risk assessment. From March 2021 to January 2024, the firm again did not maintain an adequate firm-wide risk assessment. Furthermore, between June 2017 and April 2019, the firm did not establish and maintain the necessary policies, controls, and procedures to meet regulatory requirements. A similar failure was noted from January 2020 to January 2024.
For the accounting periods ending July 2021 and July 2022, the law firm did not obtain the required accountant’s reports within the specified timeframe. From September 2021 to November 2022, they did not effectively investigate and resolve discrepancies shown by client account reconciliations.
As a result, the firm was directed to pay a financial penalty and was ordered to cover costs due to the seriousness of the conduct. The breaches related to significant matters such as money laundering prevention and client money management.
After assessing the breaches, it was identified that the firm had not consistently complied with vital financial and risk management principles, although there were periods between April 2019 and 2020/2021 where compliance was documented. Despite partial remediation, the lingering issues led to the SRA's decision to enforce penalties.