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A Berkshire firm is the latest to be fined a percentage of its turnover over its failure to conduct a compliant firm-wide money laundering risk assessment. Fairbrother & Darlow, in Bracknell, was directed by the Solicitors Regulation Authority to pay a £16,052.80 fine as well as costs of £1,350.
The SRA said it had imposed the penalty for a breach of regulatory obligations which persisted for longer than was reasonable. The regulator said: ‘It demonstrated a pattern of non-compliance and was reckless.’
According to a decision notice, in March 2022, the SRA’s anti-money laundering proactive team undertook a desk-based AML review at the firm to assess its compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
It was found that the firm did not have a compliant firm-wide risk assessment or policies, control, and procedures in place.
The firm had been undertaking in-scope work since 2010. The review found four in-scope files had no client/matter risk assessments, the SRA said.
The firm’s compliance officer for legal practice completed an online declaration in January 2020 in the 'mistaken belief' that the firm was compliant. Fairbrother & Darlow was fully compliant by May 2023.
The regulator said the firm’s conduct was ‘serious’ and ‘had the potential to cause serious harm to the public interest and to public confidence in the legal profession’.
It added: ‘The firm failed to have proper regard to the SRA’s guidance and warning notices which explained what was required, the risks that failure to comply with AML requirements posed, and the regulatory consequences of failing to comply.’
The fine was based on 1.6% to 3.2% of the firm’s annual domestic turnover. The SRA said it considered Fairbrother & Darlow’s conduct in the ‘mid-range’.
In mitigation, the regulator acknowledged that no significant harm had been caused, while the firm had made admissions, cooperated with the SRA, and remedied the breaches.
