50 lawyers fined for AML rule breaches in the last six months and there is MORE TO COME

The Solicitors Regulation Authority (SRA) has handed out 50 fines totalling £575,000 for anti-money laundering (AML) rule breaches in the last six months and promised to “ratchet up the consequences” for firms that still do not comply.

SRA chief executive Paul Philip said this week:

• “We are concerned that we’re still finding fairly basic deficiencies in AML arrangements within firms.”
• “It’s probably not deliberate – it’s probably lots of smaller firms that are just not au fait [with the rules] or don’t have capacity or just not paid attention, but the fact is that not having things like a risk assessment in place increases the probability of money laundering.
• “We’ve been saying this for years, so we will continue to ratchet up the consequences for people who don’t comply.”

The SRA has been handing out regular fines over the last couple of years. The main failures have been not having in place

• A firm-wide risk assessment and/or
• Policies, controls, and procedures to mitigate and manage effectively the risks of money laundering and terrorist financing and
• Not undertaking client and matter risk assessments.

Since Legal Futures last reported on the fines in mid-December, there have been 50 more doled out, totalling around £575,000.

• https://www.legalfutures.co.uk/compliance-and-regulation/sra-issues-highest-fine-to-date-amidst-aml-breaches-blitz

and as LEGAL FUTURES reported yesterday, the SRA is looking to speed up introduction of its new unlimited fining power for cases involving economic crime.

• https://www.legalfutures.co.uk/latest-news/sra-to-revise-fining-guidance-on-economic-crime-and-drink-driving

At the moment, the maximum fine the SRA

• can impose on traditional law firms is £25,000, meaning it has to refer cases to the Solicitors Disciplinary Tribunal, which has unlimited fining powers, where it believes more is warranted.
• However, the upper limit is £250m for alternative business structures, so the largest fines in the past six months have been for these firms, including
• Yorkshire firm Holden Smith (£36,622),
• Hayes & Storr in Norfolk (£34,046),
• Nexus Solicitors in Manchester (£31,217) and
• Tyndallwoods of Birmingham (£27,813).
• Traditional firms fined at or near the limit include
• Reading firm Harrisons (£25,000),
• Underwood Solicitors in central London (£25,000),
• Hertfordshire practice Duffield Harrison (£25,000),
• Hunter’s in High Wycombe (£24,820) and
• London firm Statham Gill Davies (£24,498).

The Duffield Harrison sanction

• Specifically states that, after applying the SRA fining guidance and reducing the amount for mitigation, the final figure was £26,359 but that it would be “wholly disproportionate” to send the case to the tribunal.

Manchester sole practitioner Lisa Tonge

• The smallest fine of the 50 was £658, given to Manchester sole practitioner Lisa Tonge.
• The fine is based on a practice’s turnover.

2025 targets

• The SRA’s target is to conduct 700 AML inspections of law firms – both desk-based and onsite – in the year to 31 October 2025.
• Its latest performance report shows that it delivered 297 in the first four months of the year, 128% of the target.
• Papers from the most recent SRA board meeting also showed that the regulator is planning another data-gathering exercise from the whole profession about AML, sanctions, and suspicious activity reports.
• It will start at the end of June and run for six weeks.

SRA chief executive Paul Philip told the board

• “The information obtained will be used to improve our understanding of risk and how we allocate our resources effectively,”
• Explaining that it used machine learning to help prioritise which firms to look at.

Professional Body Anti-money Laundering Supervision (OPBAS

• The SRA’s AML work is overseen by the Office of Professional Body Anti-money Laundering Supervision (OPBAS) and Mr Philip said it last week completed a full eight-day inspection of the SRA.
• In 2023, HM Treasury consulted on the future of AML supervision, with options including a beefed-up OPBAS and a single supervisor for the legal sector – a role the SRA has put itself forward for – but the government has yet to decide.
• https://www.legalfutures.co.uk/latest-news/sra-makes-pitch-to-be-sole-aml-supervisor-for-uk-legal-sector

SOURCE

https://www.legalfutures.co.uk/latest-news/sra-to-ratchet-up-aml-blitz-after-575000-of-fines-in-six-months