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Law firm to pay £9,993.40 fine after SRA find AML failures.

29/04/2024

Clement Hughes & Co (the firm) [https://clement-hughes.co.uk/] was fined £9,993.40 for failing to have in place relevant documentation to prevent activities relating to money laundering and terrorist financing as required by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs 2017).

In early – mid 2022 the SRA’s Anti-Money Laundering (AML) Proactive Team undertook a review of the firm’s AML compliance and found the following areas of concern surrounding the firm’s compliance with the requirements for:

  1. A Firm Wide Risk Assessment (FWRA);
  2. Policies, Controls and Procedures (PCPs); and
  3. Client Matter Risk Assessments (CMRA).

More specifically, the firm did not have.

  1. A documented and compliant FWRA until 16 April 2020.
  2. Fully compliant PCPs until December 2022.
  3. Four files sampled by the SRA also did not contain CMRAs as at April 2022.
  4. The firm started to assess client/matter risk on matters from April 2022.

Decision on sanction

  • The firm was directed to pay a financial penalty of £9,993.40 and ordered to pay costs of £1,350.
  • This was because the firm’s conduct was serious by reference to the following factors in the SRA Enforcement Strategy:
    • Its conduct was a breach of its regulatory obligations which persisted for longer than was reasonable. It demonstrated a pattern of non-compliance.
    • The firm failed to have proper regard to the SRA’s guidance and warning notices which explained what was required, the risks that failure to comply with AML requirements posed, and the regulatory consequences of failing to comply.
    • The firm was responsible for its own conduct which was serious and had the potential to cause harm to the public interest and to public confidence in the legal profession.
  • In view of the above, the firm’s conduct was placed in conduct band C which has a financial penalty of 1.6% to 3.2% of annual domestic turnover. In light of these factors, the firm’s conduct was placed in the mid-range of this band at C3 (2.4% of annual domestic turnover).

SOURCE

https://www.sra.org.uk/consumers/solicitor-check/051556/?utm_source=LinkedIn&utm_medium=MM

SANCTIONS FINES UNITED KINGDOM

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