AML: One firm taken to tribunal for breaches
The Solicitors Regulation Authority (SRA) has issued the highest fine since the limit went up to £25,000 among 14 handed out in recent weeks for breaches of the anti-money laundering (AML) rules.
Another law firm has been fined by the Solicitors Disciplinary Tribunal (SDT) for the same failures of not having the paperwork and procedures in place. It is unclear why the SRA sent this case to the tribunal rather than issue a fine itself.
The common failures were not having in place for several years a firm-wide risk assessment (FWRA); policies, controls and procedures (PCPs) to mitigate and manage effectively the risks of money laundering and terrorist financing; and not undertaking client and matter risk assessments (CMRAs).
The fines listed below indicate a certain lack of consistency in how they were set by different SRA adjudicators, and also in how they were recorded in the public notices.
Freedman + Hilmi in central London was fined £24,540, which the SRA confirmed was the highest it has issued since the new fining power came into force in July 2022.
Unlike all the other firms fined recently, it only fell foul of one of the areas: none of the six files examined by the SRA showed evidence of CMRAs.
The size of the penalty reflected the firm’s turnover of £4.1m in 2023/24, with the SRA fining guidance leading to a figure set at 0.8% of this, less a 25% discount for admitting its misconduct, implementing a new process to record its risk assessments, and co-operating with the SRA.
Jordans Solicitors in the West Midlands actually received a large firm of £24,954, but as it is an alternative business structure, the £25,000 limit does not apply – it is £250m for such practices. As well as the common breaches, it was also of a size to need an independent audit function but did not have one.
The turnover and percentage of the fine were not specified – it was at the “lower end” of the 3.6%-5% band, less a 20% discount.
The other firms fined were (where the fine figure is discounted for mitigation, this was generally for remedying the breach, causing no actual harm, and co-operating with the SRA).
- Wrigley Claydon in Oldham: £24,123 (2% of turnover less 20%)
- Stenfield in North London: £22,345 (turnover and percentage not specified – at “higher end” of 1.6%-3.2% band, less 10% discount). The firm also failed to provide staff with any AML training.
- Paul Berg & Taylor in Harpenden, Hertfordshire: £21,588 (2.4%). The firm was not in breach over CMRAs.
- Amanda Shaw Solicitors in Horsham, West Sussex: £15,960 (1.2% less 20% discount).
- Stamp James in Exeter: £12,152 (1.6% less 30% discount). The firm was not in breach over CMRAs.
- Placidi Law Company in Southampton: £7,200 (2.4%, no discount due to not initially co-operating with the SRA). The firm was not in breach over CMRAs.
- Emerys Jones & Co in Welshpool, Wales: £6,592 (2.4% less 20% discount)
- Shranks in central London: £6,500 (turnover and percentage not specified – at “lower end” of 1.6%-3.2% band).
- L.A.R.K. Solicitors in North London: £6,003 (3.6% of turnover, with 10% discount). It also submitted overdue qualified accountants’ reports, allowed a client account shortage of £887.50 to exist for several years, and held 83 dormant balances worth £41,000.
- Roche Legal in York: £4,698 (1.6% less 20% discount). The firm was not in breach over CMRAs.
- The Oakley Shee Partnership in the City: £2,734 (turnover and percentage not specified – at “lower end” of 1.6%-3.2% band – less 15% discount). The firm was not in breach over PCPs.
- Wilfred Light & Reid in Southampton: £2,566 (2.4% less 10% discount). The firm, a registered sole practice, had an FWRA.
Southport firm Cockshott Peck Lewis was taken to the SDT for not having an FWRA or CMRAs in place, and not adequately training staff.
The tribunal approved an agreed statement of facts and outcome that led to a fine of £24,892. This did not on its face show that its actions had been materially different from those that were just fined by the SRA.
Cockshott Peck & Lewis had to pay costs of £5,107. Those fined by the SRA paid costs of either £1,350 or £600.
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