An Essex firm has agreed to pay £120,000 for anti-money laundering breaches in a rare case that went as far as the Solicitors Disciplinary Tribunal.
Tolhurst Fisher LLP, based in Southend, agreed the outcome with the Solicitors Regulation Authority and the sanction was then rubber-stamped by the tribunal last month. The regulator can only impose fines up to £25,000 against non-ABSs and after that must refer the case to the SDT. The vast majority of the AML-related fines of the last two years have been dealt with in-house but this was deemed more significant.
The tribunal heard that a desk-based review was conducted by the SRA after the firm had completed an AML questionnaire in 2023.
A review of the documents provided by the firm and of eight client files found that none contained a documented client and matter risk assessment. There was also no evidence that a source of funds check had been conducted for any of the reviewed files.
At least 70% of the firm’s work came within the scope of money laundering regulations, with most of that being conveyancing.
The firm, which employed 43 people as of last year, accepted it had no risk assessment in place at all from the new money laundering regulations coming into effect in 2017 until 2019. The document in place after that point was not adequate to satisfy the rules until January 2024.
Misconduct stretched back further: the firm admitted failing to have the appropriate safeguards in place from 2007 to 2017. During this period, the firm had in place a policies and procedures document but it was not reviewed or updated appropriately – even while guidance was being issued by the SRA about how to stay compliant.
On one of the files reviewed there were no source of funds checks on a £270,000 property purchase entirely funded by monies transferred by the client. In another, a business purchase was funded through a combination of client savings, a personal loan from family members and an investment loan from a third party company. The firm failed to carry out any adequate source of funds inquiries and could not show whether any due diligence had taken place.
The SRA said the conduct had taken place over a 15-year period, covering two sets of money laundering regulations where several warnings had been issued to the profession.
In mitigation, the firm had promptly cooperated, improved and corrected relevant policies and procedures and made full and frank admissions to avoid a substantive hearing.
Agreeing the outcome, the tribunal said: ‘A well-established firm of its size and level of resources ought reasonably to have known that the misconduct was in material breach of its obligations to protect the public and the reputation of the legal profession.’
Tolhurst Fisher also agreed to pay £25,290 costs.
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