A Birmingham firm which failed to have the right anti-money laundering measures in place for seven years has been fined more than £27,000.
Solicitors Regulation Authority investigators found that Tyndallwoods Solicitors did not have the required risk assessment and policies, controls and procedures documents from 2017 to last September.
The regulator had carried out an inspection at the firm to assess compliance and found a number of potential failings. In two of eight files reviewed, the firm had not conducted ongoing monitoring, including scrutiny of transactions and customers’ source of funds checks. In three of eight reviewed, the firm failed to carry out any or any adequate due diligence.
Tyndallwoods admitted breaching SRA principles and failing to comply with AML legislation.
The SRA said the firm showed a ‘disregard for statutory and regulatory obligations’ and had the potential to cause harm by facilitating dubious transactions. This could have been avoided if there had been adequate risk assessments and controls in place.
It was acknowledged that the firm had implemented compliant processes ‘promptly’ after feedback was provided, and it cooperated fully with the investigators. There was no evidence of harm to consumers or third parties and a low risk of repetition.
The SRA added: ‘Although there was no direct loss to clients, the firm’s failure to ensure it had proper documentation in place, for at least seven years since the MLRs 2017 came into force, put it at greater risk of being used to launder money, particularly when acting in conveyancing transactions (which accounts for circa one third of the firm’s turnover).
‘The nature of conveyancing is considered high risk, owing to the risk of abuse of the system by criminals. This left the firm at risk of being used to launder money and in turn increased the risk of harm.’
The penalty was assessed as being 2.4% of annual domestic turnover, which resulted in a basic fine of almost £40,000. The amount was reduced to £27,813 based on the mitigation provided.
The SRA was able to levy a fine of more than £25,000 because of Tyndallwoods’ status as an alternative business structure. The firm also agreed to pay £600 costs.
