AML: Long-term failures to comply
A law firm in Essex is the latest to receive a hefty fine from the Solicitors Regulation Authority (SRA) for not complying with anti-money laundering rules.
Symons Gay & Leland in Ilford was fined more than £12,000 after the regulator found that it did not have in place a fully compliant firm-wide risk assessment for more than five years to the end of 2022.
It also did not have fully compliant policies, controls and procedures for six years, and failed to undertake proper client/matter risk assessments on five files.
These are all required by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
According to an SRA notice published yesterday, the findings followed a desk-based review of the firm’s compliance and a notice first served in July 2022.
Since then, the firm’s policies have been brought into compliance and the breaches, “which were not intentional”, have been remedied, the SRA said. Symons Gay & Leland has “shown some insight and made partial admissions”.
The SRA fining guidance led to a figure of 2% of the firm’s turnover, £12,636, along with costs of £1,350.
It said the breaches formed “a pattern of misconduct”, continuing: “The firm was responsible for its own conduct which was serious and had the potential to cause harm to the public interest and to public confidence in the legal profession.”
There has been a stream of penalties over recent months for law firms that were not complying with AML rules (see here and here), and last week we reported on one of the largest, £46,000 for a Coventry law firm.
The saddest thing about these fines is that hey are totally avoidable and can be prevented from happening beforehand. Unfortunately a lot of firms are either too busy to pay attention to their AML procedures, Compliance matters etc or they don’t have the skills or understanding as to what the SRA is looking for. Due to the OPBAS pressure, all the regulators withing the professions are trying to make their presence felt, much like the FSA did in the 2000’s when it was new. Try working with the FCA where the fines are in the tens of thousands for many small businesses.
We help solicitors, accountants, & IPs manage their compliance and money laundering, but it has to be said, the poor quality of some of their record keeping and outdated policies and public facing documentation containing information like mentioning “MLR2007” and “DPA 1998” shows a lack of understanding, disinterest or professional carelessness.
Compliance in any public servicing business has to be maintained for the good of honesty and transparency, as well as fairness and professional standing, or, is it OK to treat the ignorant public with disdain and a degree of contempt?