With the regulator’s new fining powers and an updated approach to issuing financial penalties for proven misconduct, a recently published decision by the Solicitors Regulation Authority (SRA) is a stark reminder of the importance of stringent adherence to compliance regulations.
Proven regulatory or code of conduct breaches can result in severe sanctions and financial penalties for firms and their staff. Not meeting necessary regulatory standards can also harm a firm’s reputation. In this blog, we highlight the details of the SRA’s recently published decision regarding an investigation ruling involving Mr Mohammed Israr, who was directed to pay a financial penalty of £12,000 and ordered to pay costs of £1,350 for failing to adhere to core compliance requirements and risk procedure obligations.
Read the full decision details here.
2. Summary of the SRA Decision: Agreed Outcome
Mr. Israr’s case concluded in an agreed outcome wherein he accepted the following terms:
- A fine of £12,000.
- Publication of the agreement.
- Payment of the investigation costs amounting to £1,350.
3. Summary Of The Case and Key Issues Identified
Mr. Israr was involved in a conveyancing transaction, overseeing the transfer of five properties for nil consideration to a Dubai-based company. Following the transfer, one property was sold at auction, and the proceeds were deposited into a third-party bank account in Dubai. However, the transferors of the properties claimed that these transactions occurred without their knowledge or agreement. A settlement agreement was eventually reached, leading to the return of four properties but not the proceeds from the sold property.
The SRA’s investigation uncovered several issues, including failure to follow the firm’s policies and procedures for conveyancing involving commercial clients, establishing control of the client, determining beneficial ownership, conducting due checks, assessing potential conflicts of interest, and performing risk assessments.
It is noted that Mr Israr cooperated with the SRA’s investigation and has taken steps to rectify his knowledge gaps by attending relevant courses.
Considering the nature and impact of the misconduct, the SRA determined a basic penalty of £12,000 was appropriate. Mr. Israr did not gain financially from his conduct, and no adjustment was made to the fine. He was also ordered to pay the costs of the SRA’s investigation in the sum of £1,350.
4. Guidance for Law Firms
This recent case highlights the critical importance of complying with regulatory obligations and conduct requirements, especially for firms and their staff who are dealing in transactions deemed as high risk, such as property.
At The Strategic Partner, we appreciate that keeping pace with regulatory expectations and meeting the requirements is essential but time consuming and often confusing. Our services are designed to provide firms, employees, and their MLRO, COLP, and COFA with the comfort of knowing that even in the busiest of times, you remain compliant and can evidence that you are. Our objective is to empower firms to effectively manage risk, compliance, and regulation, allowing them to focus on delivering exceptional service to their clients.
We can offer expert guidance and support, including:
- Risk Management and Compliance Review – A review of the firm’s approach to regulation and compliance to include all regulatory requirements and AML procedures. The output of this provides the firm with a written gap analysis and solutions to remedy any issues.
- Risk Assessment Service and Independent AML Audit – A review of the firm’s approach to regulation and compliance to include all regulatory requirements and AML procedures. The output of this provides the firm with a written gap analysis and solutions to remedy any issues.
- 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 of which provides the firm with a written gap analysis and solutions to remedy any issues that arise and ensure the firm is compliant.
- Training and Education – We offer customised training programs to educate your staff on AML regulations, source of funds and source of wealth enquiries, risk assessment, and suspicious activity detection. Our training ensures that your team is equipped with the knowledge and skills to fulfil their compliance responsibilities.
- 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.
- Ongoing Compliance Support – Our experts provide ongoing support and guidance, keeping you up-to-date with the latest AML regulations and best practices. We offer regular compliance reviews, advice on complex cases, and assistance with regulatory reporting requirements.
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
5. 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 firstname.lastname@example.org.