- Publication Date
- 2024-02-02
The Solicitors Regulation Authority (SRA) conducted an audit and reported the following actions and findings regarding a law firm. Between 2016 and June 2017, the firm did not establish and maintain appropriate and risk-sensitive policies and procedures as required by the Money Laundering Regulations 2007. From June 2017 to May 2023, the firm lacked a comprehensive firm-wide risk assessment and failed to establish and maintain necessary policies, controls, and procedures to effectively mitigate and manage money laundering and terrorist financing risks, as mandated by the Money Laundering Regulations 2017.
The firm was also required to conduct independent audits to evaluate the adequacy and effectiveness of its policies, controls, and procedures starting in 2018. Additionally, the firm did not adequately assess risks associated with clients and matters on nineteen separate client files, breaching the relevant regulations in this process.
In May 2023, the SRA assessed the firm's compliance concerning money laundering regulations, finding multiple areas of non-compliance. It was identified that these breaches continued beyond a reasonable duration, illustrating a pattern of non-compliance despite existing guidance and warning notices from the SRA. The firm was responsible for its actions, which posed potential harm to the public interest and confidence in the legal profession.
Consequently, the SRA decided that a financial penalty was warranted. The final assessment rooted the firm's misconduct within a conduct band that warranted a penalty ranging from 1.6% to 3.2% of the firm's annual turnover. Considering mitigating factors — such as the firm's compliance status with the regulations by the time of review, its admissions, and cooperation during the investigation — the penalty was positioned at the lower end of the bracket.
The SRA's decision did not include the specifics of the firm's precise governance failures, nor did it detail the mitigating factors beyond general compliance and cooperation observations. Additionally, information that would identify the firm or specific individuals involved has been omitted for privacy and compliance with reporting standards.