The Solicitors Regulation Authority carried out an investigation into the firm following a desk-based review (DBR) by our AML Proactive Supervision team.
A Desk-based Review and subsequent investigation identified areas of concern in relation to the firm’s compliance with The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017), the SRA Principles 2011, the SRA Code of Conduct 2011, the SRA Principles [2019] and the SRA Code of Conduct for Firms [2019].
Firm-wide risk assessment
Between June 2017 and March 2025, the firm failed to have in place a documented assessment of the risks of money laundering and terrorist financing to which its business was subject (a firm-wide risk assessment (FWRA)), pursuant to Regulations 18(1) and 18(4) of the MLRs 2017.
The firm was required to have an FWRA, which includes details of the firm’s assessment of risks in five key areas. The firm failed to have in place an appropriate FWRA prior to March 2025.
The firm has since provided an FWRA, which is compliant with Regulation 18 of the MLRs 2017.
The amount of the fine has been calculated in line with the SRA’s published guidance on its approach to setting an appropriate financial penalty. Having regard to the Guidance, the SRA and the firm agreed that the nature of the misconduct was more serious (score of three). This is because the firm failed to ensure that it was fully compliant with its statutory obligations until March 2025, a period of almost eight years since the MLRs 2017 came into effect.
The breach has arisen because of recklessness and a failure to pay sufficient regard to money laundering regulations, published guidance and SRA warning notices.
The SRA and the firm also agreed that the impact of the harm or risk of harm is low (score of two). The nature of conveyancing is considered high-risk, owing to the risk of abuse of the system by criminals. Almost half of the firm’s work is in the field of conveyancing, plus the firm performs other in-scope work too. However, there is no evidence of there being any direct loss to clients or actual harm caused as a result of the firm’s failure to ensure it had proper AML documentation in place.
The nature and impact scores add up to five, and this places the penalty in Band ‘B’ as directed by the guidance. The guidance indicates a broad penalty bracket of between 0.4% and 1.2% of the firm’s annual domestic turnover.
Based on the evidence the firm provided of its annual domestic turnover for the most recent tax year, this results in a basic penalty of £3,304. The SRA considered that the basic penalty should be reduced to £2,809 to take account of the following factors set out in the Guidance:
- Remedying harm – the firm took steps to rectify its failings, reviewed and amended its FWRA and is compliant with the MLRs 2017.
- Cooperating with the investigation – the firm has cooperated with the SRA’s AML Proactive Supervision and AML Investigation teams.
- Admitting the breaches at the earliest opportunity.
The firm does not appear to have made any financial gain or received any other benefit as a result of its conduct. Therefore, no adjustment is necessary to remove this, and the amount of the fine is £2,809.