£57k in fines in two days: SRA ramps up AML action

The Solicitors Regulation Authority has signalled its most intensive clampdown on firms breaching money laundering regulations, with fines of more than £57,000 announced in two days.

Since the start of this week, the regulator has confirmed financial sanctions against five different firms for similar failures to comply with obligations to prevent the risk of money laundering activity.

Each of the fines was issued in the last two weeks, as the SRA continued to pursue action against firms for historic issues.

The largest financial penalty was handed to Oldham firm Wrigley Claydon Solicitors, which agreed to pay £24,123 and costs of £600 after failing to have a documented risk assessment between 2017 and 2023. Based on three of six files reviewed it was identified the firm failed to conduct client and matter risk assessments.

The SRA said the firm’s conduct showed a ‘disregard for statutory and regulatory obligations’ and had the potential to cause harm, by facilitating dubious transactions that could have led to money laundering. This could have been avoided had the firm established adequate AML documentation and controls.

There was no evidence of harm to consumers or third parties, a low risk of repetition and the firm did not financially benefit from the misconduct.

The basic penalty was more than £30,000 but this was discounted by 20% due to mitigating factors, pushing the fine below the £25,000 limit for those that the SRA can issue.

Surrey firm Hill Johnson & Leo was fined £18,094 after compliance issues were identified by SRA inspectors. The firm did not have a compliant risk assessment from 2017 to 2023 and as far back as 2011 could not show that it had carried out the required due diligence on new clients.

Again the firm was said to have showed a disregard for its obligation and created the potential to cause harm, although there was no evidence of harm to any consumer. There was no financial benefit and a low risk of repetition.

North west London practice L.A.R.K Solicitors was fined £6,000 for not having in place a documented firm-wide risk assessment for five years and failing to tailor its new risk assessment to the firm. It also failed to maintain records of its risk assessment, although that has now been remedied.

The firm submitted two qualified accountant reports to the SRA which were at least three years overdue and allowed a client account shortage of almost £900 to exist through payments in excess of funds held.

There was no financial benefit to the misconduct, low risk of repetition and no evidence of harm to consumers.

VKM Solicitors of Wolverhampton and Birmingham firm Margetts & Ritchie were also fined £4,932 and £3,828 respectively for AML breaches.

Both firms had caused no harm to consumers or third parties and had remedied the breaches identified.

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