The Solicitors Regulation Authority has issued a fine of almost £173,000 after a firm represented a foreign client without doing the required background checks. Taylor Vinters LLP acted for the client, classed as a non-domestic politically exposed person, in a residentially property purchase in 2017.
Money laundering regulations at the time required the firm to seek approval from senior management for establishing a business relationship with such a person, and to take adequate measure to find out the source of their wealth and funds. In addition, monitoring was required as long as the business relationship continued.
The Cambridge-based firm, which has since merged with Mishcon de Reya, did not identity the client as a PEP until two months after the purchase had completed. It had previously given inaccurate information to another firm involved in the transaction when it said the identity of the buyer had been verified.
The firm admitted failing to comply with AML legislation and failing to run its business effectively and in accordance with proper governance principles.
The SRA said Taylor Vinters had been obliged to provide accurate information and was directly responsible for its conduct. ‘It is in the public interest that firms ensure compliance with the money laundering regulations,’ it added. ‘A failure to do so has the potential to cause significant harm by exposing the firm to the risk that its services will be used to carry out money laundering or terrorist financing. Where thorough checks are conducted, this mitigates and manages the risk and ensures that the public can take comfort that firms are complying with their legal and regulatory obligations.’
The fine was calculated at around £247,000, but this figure was reduced to account for early admissions and full cooperation with the investigation. The firm made no financial gain or received any other benefit from its conduct.
The SRA was able to exceed its £25,000 fining threshold because Taylor Vinters was an alternative business structure.
A spokesperson for Mishcon de Reya said: ‘The SRA has announced a fine against Taylor Vinters relating to errors made in 2017 under their legacy systems. We are pleased the SRA reduced its basic fine to account for early admissions and full cooperation with the investigation.’
In 2020, Taylor Vinters agreed to be fined almost £20,000 after accepting it failed to carry out due diligence on a string of other foreign investor clients. The firm made a regulatory settlement agreement with the SRA after admitting four rule breaches under money laundering regulations.
