AML: Firm took years to get into compliance
An East London law firm has become the latest to be fined by the Solicitors Regulation Authority (SRA) over its failure to comply with anti-money laundering rules.
Edell Jones & Lessers accepted the fine of £3,711 in a regulatory settlement agreement with the SRA, plus costs of £600.
Much of its work was in scope of the money laundering regulations, with the majority coming from commercial conveyancing (42%), residential conveyancing (33%) and probate (14%).
“This puts it at a higher risk of being used to launder money,” the SRA said, although there was no evidence of there being any direct loss to clients or actual harm caused as result of the firm’s breaches.
The SRA said that, between June 2017 and January 2020, the firm did not have a firm-wide risk assessment (FWRA) or the policies, controls, and procedures (PCPs) required to mitigate and effectively manage the risks identified.
Then, for the next four years, the FWRA and PCPs put in place fell short; it was only in April this year that the firm provided compliant documentation.
Further, between June 2017 and February 2024, Edell Jones failed to conduct client and matter risk assessments.
The agreement said: “The conduct 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 adequate AML documentation and controls.”
A fine was “a proportionate outcome in the public interest because it creates a credible deterrent to others”.
There was “a low risk of repetition” and the firm had “shown remorse for its actions”.
The SRA’s fining guidance led to a figure of 2.4% of its annual domestic turnover of £171,802. This was then discounted by 10% to reflect that Edell Jones was now compliant and had co-operated with the investigation.
Though there has been a steady stream of cases like this in recent months being resolved without the need for referral to the Solicitors Disciplinary Tribunal, that can still happen.
The SRA this week announced that Amir Nazir Butt of Peterborough firm ANB Law is to face the tribunal, although not all of the charges relate to anti-money laundering.
He is accused of not having an FWRA, PCPs or client and matter risk assessments in place between June 2017 and the end of 2022, as well as not providing any or any adequate anti-money laundering training for staff.
Further, he is alleged to have made a declaration to the SRA in early 2020 “which was false and misleading in that it confirmed that the firm had in place a fully compliant FWRA”.
He also stands accused of failing to ensure that client money was returned promptly to the client between November 2014 and December 2022.
The details of the allegations are not yet public. They are subject to a hearing before the tribunal and are as yet unproven.
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