A Yorkshire firm that was not complying with anti-money laundering regulations until as recently as November has been fined more than £36,000.
The Solicitors Regulation Authority said a penalty imposed on Huddersfield-based Holden Smith Law was based on the firm’s ‘pattern of behaviour’ which increased the risks of laundering illicit funds.
Investigators found that from February 2019 to November last year the firm failed to conduct client and matter risk assessments as required by money laundering regulations.
The SRA supervision team reviewed eight of the firm’s files and found none with a compliant risk assessment.
The firm admitted breaching SRA principles and failing to have effective governance systems in place.
There was no evidence of harm to consumers and the SRA assessed the risk of repetition as low. Holden Smith has already taken steps to rectify its failures and now complies with regulations. It cooperated with the investigation, admitted the breaches and has shown remorse.
But the SRA said the 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 conducted and documented risk assessments on its clients and files on in-scope matters.
The issue was more serious because the firm undertakes significant conveyancing work which is considered a high-risk area. It also failed to follow published guidance on how to avoid breaching MLRs, the most recent of which was in October 2023.
The penalty was initially set at £52,318 but reduced to £36,623 to reflect the mitigation. The firm made no financial gain or any other benefit from its misconduct. As well as the fine, Holden Smith also agreed to pay £600 costs.
The firm’s most recently-published accounts, covering the year to 31 October 2023, shows the business is in good shape, with net assets increasing in a year by 20% to £643,294. At the end of the period it employed 91 people.
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