A London-based law firm and its director have been fined £25,000 each – totalling £50,000 – for serious compliance failures, including breaches of the SRA Accounting Rules and anti-money laundering (AML) deficiencies. The Solicitors Disciplinary Tribunal (SDT) found that the director falsely claimed that the firm had implemented a Practice-Wide Risk Assessment (PWRA). An investigation by the Solicitors Regulation Authority (SRA) uncovered inaccurate client account reconciliations, a £40,600 shortfall affecting 423 matters, and £287,800 in residual balances across 1,786 cases, with funds only being returned following an intervention by the SRA. The director also failed to conduct client account reconciliations on time and allowed improper fund transfers between clients.
The SDT criticised widespread failures in AML procedures, noting that 12 of 15 conveyancing cases reviewed had issues, including unclear Source of Funds evidencing and third-party payments from China, indicating risks of potential Chinese Underground Banking. Despite arguments that breaches were unintentional and caused by workload pressures during Covid-19, the tribunal ruled the risks were “clear and real” and reflected firm-wide deficiencies, including poor staff training. Alongside the fines, £38,000 in costs were imposed, and the director was barred from holding future compliance roles.
Article by Legal Futures ‘Director and Law Firm Fined £50,000 for Multiple Compliance Failures’: