Fines totalling £25,000 highlight risk of non-compliance

Four SRA regulated law firms have fallen foul of Anti-Money Laundering and Transparency regulations and received fines totalling over £25,000. 

Some of the first published fines are now coming light following the extension of SRA fining powers in July 2022, which empowered the SRA to fine firms for a broad range of offences without having to refer to the Solicitors Disciplinary Tribunal (SDT); from lower-level cases involving inadequate staff training to those with more serious consequences including failure to implement the appropriate checks required to uncover signs of money laundering by clients.

In January the SRA announced they would be clamping down on firms who are not complying with transparency rules with Chief Executive Paul Philip rejecting claims that the guidance provided is not easy to follow.

“(These are) lawyers, who are used to dealing with detailed propositions and it’s not that detailed. Given the rules have now been in force for coming up to four years and the fact that this group of firms have previously provided a declaration of compliance, we intend to take a more robust enforcement approach. Longer term we will also be looking to utilise the proposed new fining powers as part of this enforcement exercise.”

The SRA have published details of three London based firms who have been fined for failing to comply with transparency rules after repeatedly failing to publish details about fees, detailing complaints procedures and displaying the SRA’s digital badge on their websites.

Achom and Partners was ordered to pay the largest fine levied for transparency failures to date; £3,500 and £600 in costs. Archstone Solicitors had been fined £1,600 and ordered to pay £600 costs and A&T Legal Limited (trading as Leaside Law) must pay a £2,000 fine and £600 costs.

Separately Oxfordshire based Ferguson Bricknell has been fined £20,000 for anti-money laundering failures. The firm has failed to put a firm-wide risk assessment in place, despite declaring it had done so. The fine, the largest levied by the SRA to date, was imposed despite an acknowledgement from the SRA that there was no impact on third parties and no evidence of money laundering having taken place.

“The conduct (of Ferguson Bricknell) showed a disregard for statutory and regulatory obligations and had the potential to cause harm, by facilitating dubious transactions that could have led to money laundering (and/or terrorist financing). This could have been avoided had the firm established an adequate practice-wide (firm-wide) risk assessment.”

Further details around the case have been provided by the SRA. The firm had failed to properly assess risks associated with its conveyancing activity (including controlling client monies) which accounted for 75% of fee income. Subsequent file review found that the firm did not always check and verify source of funds and had “weak” ongoing monitoring of transactions.

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