A Midlands firm which wrongly rated three property transactions as low risk has been fined £14,000 for breaching anti-money laundering rules.
Seatons Law Limited, based in Corby, agreed the outcome with the SRA after an investigation into various conveyancing matters from 2018.
In one case, the firm was instructed to act on behalf of the seller under a power of attorney and obtained certified bills, a passport and driving licence for the attorney. But no photographic identification was obtained for the donor at the time, and the firm met neither the donor or attorney in person.
When solicitors on the other side of the transaction asked if the firm had ID for both donor and attorney, Seatons said that it had, and completion took place with £45,500 paid into a bank account in the name of the attorney.
But HM Land Registry delayed completing registration pending the receipt of additional information, and as of this summer had refused to register the transfer, meaning the title of the property is still registered to the donor and not the purchasers. Seatons has since tried to rectify the position with its professional indemnity insurers.
The SRA stressed that conveyancing work should be allocated the highest risk and additional information should have been sought to verify the identities of those involved in transactions. Documents that had been verified did not confirm that the certifier, who was not known to the firm, had met the parties.
The firm was also unable to confirm where the funds in the third matter originated from and made insufficient checks to ensure they were from a legitimate source and not the proceeds of crime. Various ‘red flag indicators’ were missed, including the firm being based in Northamptonshire and clients in Luton.
The firm admitted failing to perform adequate customer due diligence, failing to perform ongoing monitoring and failing to have in place an adequate anti-money laundering policy.
The SRA said the firm was now at low risk of repetition and had assisted throughout the investigation. The basic financial penalty was set at 0.9% of turnover during the relevant period, reduced by the maximum 40% allowed based on mitigation. The firm must also pay £3,500 costs.
The agreed outcome coincides with renewed calls this week from the SRA to make due diligence checks on clients and their source of funds to combat the threat of money laundering.