- Publication Date
- 2024-05-23
In June 2017, the law firm failed to have an appropriate process in place to sufficiently assess the level of risk regarding money laundering. The SRA conducted a forensic investigation into the firm's activities, examining their compliance with the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs 2017). The investigation revealed several breaches over a period extending to March 2024. These included using client accounts improperly and not adequately managing associated risks.
The relevant lawyer did not establish a firm-wide risk assessment that identified and assessed the risks of money laundering pertinent to their business operations. Additionally, the firm did not maintain fully compliant policies, controls, and procedures to mitigate these risks. The SRA's findings included that the firm's client account was used improperly between March and April 2023.
The SRA determined that the law firm had allowed breaches to persist longer than necessary, despite making significant improvements to its anti-money laundering policies. It noted that while the firm had taken steps to remedy the harm, no actual harm had materialized, and the firm had cooperated with the investigation.
Consequently, the firm was directed to pay a financial penalty and costs, calculated as a percentage of its annual domestic turnover. The SRA deemed a financial penalty an appropriate measure due to the seriousness of the firm's conduct failures, which had the potential to undermine public confidence in the legal profession.
The SRA Enforcement Strategy factors identified the persistent nature of the breaches and the firm's lack of adherence to guidance and warnings regarding anti-money laundering compliance. Over time, the firm's conduct was placed in a mid-range financial penalty band due to both aggravating and mitigating factors taken into account by the SRA.