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Protecting Against Money Laundering: Lessons Learned from £23,216 SRA Fine
January 17, 2024

Introduction

In a recently published case, a law firm has been fined £23,216 by the Solicitors Regulation Authority (SRA) for Anti-Money Laundering (AML) failures. The fine, nearly the maximum allowed by the SRA, resulted from an investigation into three property transactions undertaken by the sanctioned firm between 2018 and 2020.

Details of the case 

TTS Legal Ltd was found to have failed to check the sources of funds for these deals, with concerns raised about the firm’s compliance with money laundering regulations and its code of conduct.

The SRA identified issues such as the absence of a firm-wide risk assessment until January 2020 and a lack of policies to mitigate money laundering risks. One transaction involved inconsistent information from the client about funding, and TTS Legal failed to verify a deposit payment of £185,000 purportedly made by a previous firm. It was later revealed that the previous firm had never been involved in the matter.

Additionally, TTS Legal released £46,000 to the seller’s solicitor based on the client’s financial adviser’s instructions, who lacked authorisation. The SRA criticised the firm for failing to scrutinise the source of significant amounts of money and highlighted the inability to verify if funds were free from criminal proceeds.

Despite no evidence of harm to consumers or third parties, the SRA imposed a fine equivalent to 2% of TTS Legal’s annual turnover, reduced by 20% for mitigating factors. The firm must also cover £1,350 in costs. The SRA acknowledged improvements in the firm’s compliance but stressed the importance of stringent AML measures to prevent a recurrence of such failures.

Read the full decision details.

Guidance for Law Firms

As this case highlights, the importance of complying with money laundering regulations is vital. 

At The Strategic Partner, we work with firms, their MLROs, MLCOs, and their COLPs and COFAs to provide tailored training and outsourced support solutions. Our objective is to help these firms effectively manage risk, compliance, and regulation. By establishing and maintaining a compliant structure, we aim to enable firms, their managers, and owners to concentrate on operating their businesses and delivering exceptional service to their clients.

If you believe your firm may be at risk or wish to confirm your firm is achieving the required standard, we offer a range of compliance solutions at The Strategic Partner, including:

  • Regulation 21 AML 2017 Independent Audit – A review of the firm’s approach to regulation and compliance to include AML procedures with the audit meeting the requirements of Regulation 21 of the AML 2017. The output provides the firm with a written gap analysis and solutions to remedy any issues and ensure compliance.
  • Training – Our Typical AML Training Includes

AML Training for ALL staff to meet the firm’s obligation to provide annual training.

1-2-1 training for the MLRO and MLCO on their obligations and requirements.

  • Auditing – Procedural staff, systems, and files to ensure the procedures are up to the required standard and being implemented at case level with a report of the outcome.
  • Packaged Solutions – Implementation of robust solutions to ensure the firm achieves compliance and then maintains compliance through the provision of ongoing support and assistance:

Risk, Regulation and Compliance Service (including AML).

Risk, Compliance, AML Guidance and Register Administration Service.

Get in touch with The Strategic Partner

For more information on The Strategic Partner and to discuss how we may be able to assist in accelerating your risk management or compliance and regulation or simply to keep this up to date you can call us on 020 3911 9710 or email us at info@thestrategicpartner.co.uk.

View the PDF version of this article here.

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