A Devon firm has been fined because it could not show that it had the obligatory anti-money laundering risk assessment in place over a period in the past.
The Solicitors Regulation Authority said that while Stamp James Solicitors currently complies with money laundering regulations, the firm was not able to show evidence that this was the case between 2019 and 2023.
All regulated practices are required to have a documented firm-wide risk assessment which must be recorded in writing. The firm was able to show a fully compliant document when the SRA sent in inspectors in September 2023, but could not locate previous versions. The same applied for the required policies, controls and procedures document designed to manage the risks of money laundering, which were again in place last year but could not be evidenced for previous years.
The Exeter-based firm was therefore found to have failed to maintain a record of these documents and was in breach of two SRA principles.
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The SRA said it was incumbent on the firm to meet the MLR requirements and it had failed to do so.
It added: ‘The conduct showed a neglect towards statutory and regulatory obligations and had the potential to cause harm, by facilitating dubious transactions that could have led to money laundering (and/or terrorist financing). This could have been avoided had the firm maintained a record of its AML documentation and controls.’
It was considered that a fine amounting to 1.6% of annual turnover was a proportionate outcome, creating a credible deterrent to others but taking account of the firm’s assistance throughout the investigation and remorse for its actions. There was no evidence of harm to consumers, a low risk of repetition and the firm did not financially benefit from the misconduct. The fine was reduced by 30% to take account of mitigation factors.
The firm agreed to pay a fine of £12,152 and costs of £600.
