A Midlands firm has been fined £13,000 after a check of a small selection of its files found none complying with all anti-money laundering regulations.
The Solicitors Regulation Authority’s proactive supervision team reviewed 11 client files as part of an inspection at Stafford practice Tedstone George & Tedstone Solicitors last year.
The firm was put on notice that no client and matter risk assessments had been found on any of the inspected files. It was directed to put in place a compliance plan for risk assessments and review all open matters to ensure they were compliant. This was completed by February this year.
The firm explained that risk assessments had been carried out previously on an informal basis and accepted that these had not been properly documented. Appropriate AML policies and procedures were now in place and would be adhered to on every new instruction.
The firm admitted failing to meet the required money laundering regulations from 2011 to 2017 by failing to determine the extent of customer due diligence. Then from 2017 to 2023 it failed to have in place a process to assess the level of risk in client matters.
The SRA said this was a ‘long-standing and serious breach of its AML regulatory obligations which persisted for longer than was reasonable’. The regulator had provided widely-publicised guidance about the obligation to comply with regulations and have the necessary documents in place. ‘It is not sufficient to say that assessments were being carried out but not documented,’ it added. ‘Although the firm took steps to become fully compliant, this was only after the involvement of the SRA.’
The financial penalty was reduced to give credit for the early admission of rule breaches, with the sanction set at 2% of the firm’s annual domestic turnover. The firm must also pay costs of £1,350.
Meanwhile, the SRA has appointed a new director of anti-money laundering as it continue to ramp up enforcement action. Alexandra Jones, who joined in August, is the former chief executive of the Registry Trust and has held senior roles at the Financial Ombudsman Service and in banking.
The regulator has increased firm site inspection visits by 34% and desk-based reviews by 350% in the past year. It completed a data collection exercise in August and September, requesting data from all firms on AML, sanctions and suspicious activity reports.
