A national firm has been fined and rebuked after failing to inform the SRA that a member of staff was believed to have misappropriated money.
According to a regulatory settlement agreement notice, Duncan Lewis Solicitors Ltd admitted misconduct after the matter went unreported for more than four months.
The firm had identified 23 cash receipts coming from clients, received between November 2015 and August 2016, where money had not been deposited into any of the firm’s bank accounts. The total value was around £6,100, which the firm has since replaced.
The firm concluded that the money had been misappropriated by an administrative assistant in its Birmingham office, who had responsibility for paying into the bank but who had not done so.
It was recorded in the firm’s breach register but was described as being ‘not-material’ and as an ‘internal issue’.
It was only when a member of the SRA’s staff met with the firm in January 2017 about unrelated matters that the breach came to the regulator’s attention.
According to SRA accounts rules, firms must maintain effective accounting systems and proper internal controls over those systems. The SRA said Duncan Lewis Solicitors breached those rules by failing to discover misappropriations over such a long period.
The firm further breached one of the SRA principles by failing to report promptly serious misconduct by an employee.
The regulator said it had taken into account admissions by Duncan Lewis Solicitors and opted to fine the firm £1,500. The firm will also pay £1,350 costs.