The Solicitors Regulation Authority has handed out the largest fine ever issued against any firm or individual working in the law profession.
The individual in question is known to have been the manager of a now-defunct London-based consolidator firm and now must pay almost £4m with additional costs of up to £41,670 as a result of overseeing hundreds of payments out of client accounts.
The fine far outdoes anything previously issued by the SRA or the Solicitors Disciplinary Tribunal. Beforehand, the previous amount was £500,000, which was given by the tribunal to another London-based firm for anti-money laundering process failures.
Remember: the SRA is able to issue unlimited fines where misconduct involves an alternative business structure.
The regulator’s investigators reportedly found evidence of as many as 310 improper transfers to companies connected to the firm’s manager. These transfers were then used to buy assets unrelated to the business, and loan repayments. The SRA also reported forged statements that attempted to cover up these unauthorised transactions.
Currently, a shortfall of around £10m remains, despite the return of some funds that have already been made. As it stands, the SRA intervention has managed to secure around £22.5m in client money. It has also been announced that the regulator has secured 220,000 files from the various offices, including over 90,000 wills and deeds.
SRA chief executive Paul Philip said: “[the manager]’s dishonesty impacted thousands of people. We stepped in to safeguard their interests, closing the firm, securing files and returning money to clients.”
A subsequent consultant who was assisting the manager in question was also disqualified from working in a law firm and ordered to pay approximately £28,230 costs. An additional colleague of the firm was disqualified from working as a firm’s head of finance and administration and ordered to pay £1,350 in costs. Another was fined £26,766 and ordered to pay an additional £1,350 in costs.
Source: here.
AML Support for Law Firms
All firms need to demonstrate and uphold high standards in their AML systems and processes, as well as in their management and supervision. This also involves outlining how the firm operates, including the conduct of staff through set policies, controls and procedures.
At Regulation & Compliance Office, we can offer a number of outsourced support solutions, including:
Regulation & Compliance Service – Our Risk Management Assessment Service has been specifically designed to review and update a firm’s approach to risk and compliance management.
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AML Training Courses – Our Typical AML Training Includes:
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