SRA publishes over £100,000 of AML fines since start of June

The Solicitors Regulation Authority (SRA) have published over £100,000 worth of fine for anti-money laundering failures since the start of June; with one firm fined nearly £80,000 alone for the failure to complete client and matter risk assessments (CMRAs) on a number of reviewed files, and failed to maintain  ‘fully compliant’ policies, controls, and procedures (PCPs),

The firm in question, Gordons Partnership, were also reprimanded for not conducting an independent audit of its AML compliance. In identifying why the fine was appropriate the SRA said the proportion of work undertaken by the firm which fell under the scope of the money laundering regulations, in this case between one fifth and one third, ‘had the potential to exposing the firm to a significant risk of being exploited by criminals.’

In a further warning to firms, although Gordons Partnership admitted fault, and the SRA acknowledged there was ‘no evidence’ of harm to consumers or third parties, the fine levied was considered a ‘credible deterrent to others’;

“The issuing of such a sanction signifies the risk to the public, and the legal sector, that arises when solicitors do not comply with anti-money laundering legislation and their professional regulatory rules.”

Manchester-based Bannister Preston Solicitors LLP have also received a sizeable fine of £22,831 after the SRA conducted a desk-based review in which it identified efforts to conduct backdated client and matter risk assessments; with a number of files all having had CMRAs completed on the same date – some of which were after completion.

In both cases the cooperation of the firms saw the penalties reduced.

Elsewhere Harrow-based Lynch Hall & Hornby were fined £16,260 with costs of £1,350; Taunton Solicitors have been fined £12,327; Wildings Solicitors LLP in Birmingham have been fined £8,061; Spencer Skuse & Potter Limited in Cardiff had a fine of £11,470; Moseley Chapman & Skemp (£9,419) Perrin Myddelton (£14,995) and sole practitioner Keith R Thompson & Co (£1,526) have also been fined.

The publication of these latest fines mirrors the beginning of May when details of over £100,000 was published by the SRA with Chief Executive Paul Philip telling journalists the regulator would continue to ‘ratchet up the consequences’ on non-compliance in his media briefing. In July the SRA will begin their annual AML data-gathering exercise to capture information on the work firms do within the scope of the money laundering regulations; any contact or involvement they have with the sanctions regime and any persons who are designated under it; and details of submission of suspicious activity reports to the National Crime Agency.

In recent weeks the Property Lawyers Alliance, an organisation which says it ‘supports, informs, and protects the integrity of all property lawyers’ has criticised the ‘oppressive’ AML regime saying it engenders a ‘culture of fear.‘ It is campaigning for reform to the  ‘crippling burden of red tape’ which it suggests runs to c.1,500 pages of official regulatory guidance, suffocating conveyancing and creating a ‘serious impediment to the efficient working of the UK property market and a significant drag on the economy’.