‘The conduct showed a failure to comply with its statutory and regulatory obligations to record written risk assessments,’ said the SRA. ‘This could have been avoided had the firm established adequate AML documentation and controls.’
Regulators judged that Freedman & Hilmi should pay 0.8 per cent of its annual turnover. They also stated that the penalty should be reduced by 25 per cent to take account of mitigation. The firm’s misconduct was deemed less serious due to the breach being classed as non-intentional, and arose due to ‘an oversight in understanding’.
Harrow-based Stenfield Limited agreed to pay £22,345 after failing to have in place required risk assessment for six years, and were ineffective in establishing AML policies until earlier this year.
This was despite the firm providing residential and commercial conveyancing services in the scope of money laundering regulations.
From 2017 to 2023 the firm failed to ensure all staff received AML training or to have kept any training records. The firm has since provided details of a comprehensive training plan.
However, there was no evidence of harm to consumers and no financial gain from the misconduct. The fine was set at between 1.6 per cent and 3.2 per cent of turnover based on multiple failings ‘which had formed a pattern of misconduct’.
The SRA’s new policy on financial penalties has been established after ongoing money laundering concerns but this year is a first for taking action. The regulator had issued a warning notice in October last year about ‘the importance of creating and maintaining client and matter risk assessments,’ and has since carried out a record pursuit of sanctions against a slew of well-known firms. Sanctions have been determined in a bespoke manner, taking into account the firm’s annual turnover and adjusting the amount to consider the effect of mitigation.
