The Solicitors Regulation Authority has imposed a £16,092 fine on a firm which failed to identify a politically exposed person (PEP) in a series of residential property transactions.
Leadenhall Law Group Limited acted for a non-domestic PEP and their associated companies across 14 residential property purchase transactions, all of which proceeded to completion.
An investigation by the SRA identified that between March 2017 and January 2020 the firm did not have systems in place to adequately identify the client as a PEP or establish the source of funds or source of wealth.
Although the SRA said the nature of the misconduct was “serious” and was the result of “a pattern… identified across the files demonstrating that the requirements of Regulation 28 and 35 of the MLRs 2017 were not met”, it classed the impact of the misconduct as medium.
The SRA explained: “PEPs are high risk clients (holding positions of power and influence, making it easier to obtain funds via corruption or by stripping assets of their country of origin) and the measures as set out in the money laundering regulations specifically have sections dedicated to PEPs requiring additional scrutiny to be applied to mitigate the increased risk.
“The firm did not identify its client as a PEP but did recognise the high-risk nature of the client. Despite this, in practice, the required actions as specified in the money laundering regulations were not adequately executed.”
The fine was considered appropriate to maintain professional standards and uphold public confidence in the profession, but was reduced to account for the firm’s cooperation and subsequent compliance with the regulations.
Following the discount for mitigation, the firm was ordered to pay £16,092 with costs of £600.
One Response
Conveyancers face severe sanctions not for dishonesty or criminality, but for technical slips within an ever‑expanding compliance maze. An imperfect compliance with mere process can threaten careers. Meanwhile, the legal profession is simultaneously expected to absorb tens of millions in compensation for failures that were not of its making. Furthermore, it is reported today that the Housing Secretary received £20,000 for speaking at the Propertymark One conference last month. So ministers are rewarded for addressing the very sector their departments burden. All of this sits within a government speaking with two voices. One promises conveyancing that is quicker, simpler, and cheaper. The other, chiefly the Treasury, imposes measures that make such ambitions impossible. The requirement for conveyancers to register as tax advisers is the clearest example yet. Costly and entirely misaligned with the realities of practice.
We are losing good, decent lawyers not through incompetence, but because they cannot reconcile their duty to clients with an AML regime that treats them as suspects first and professionals second. If the government genuinely wants fast and safer conveyancing, it must confront the many contradictions at the heart of its current policies.