Law firm fined and sanctioned after AML review finds failures in client risk assessments
The Solicitors Regulation Authority has fined Waugh & Co £15,568 following an investigation into the firm’s compliance with anti-money laundering requirements.
The regulatory outcome, published on 23 January 2026, was reached by way of a regulatory settlement agreement dated 20 January 2026. In addition to the financial penalty, the firm has agreed to the publication of the agreement and to pay £600 in investigation costs.
The investigation was initiated after a review by the SRA’s AML Proactive Supervision team. That review identified concerns relating to the firm’s compliance with the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017, alongside breaches of the SRA Principles 2019 and the SRA Code of Conduct for Firms 2019.
During a desk-based review of six files, the SRA found that the firm had failed to complete client and matter risk assessments on five of those files. The regulator concluded that this constituted a breach of Regulation 28(12)(a)(ii) and Regulation 28(13) of the 2017 regulations, which require firms to assess and document the risks associated with both clients and matters.
The firm admitted that its failures to comply with the money laundering regulations amounted to breaches of its regulatory obligations. These included a failure to maintain effective governance systems, a failure to keep up to date with and follow applicable law and regulation, and conduct that did not uphold public trust and confidence in the solicitors’ profession.
In determining the appropriate outcome, the SRA took into account several mitigating factors. It noted that there was no evidence of harm to consumers or third parties and that the risk of repetition was considered low. The firm had taken steps to bring itself into compliance by training fee earners on the completion of client and matter risk assessments and by adopting a compliant assessment template. The firm also cooperated with the SRA throughout both the proactive supervision and investigation stages.
However, the SRA concluded that a financial penalty was necessary. It said the failures demonstrated a disregard for statutory and regulatory obligations and had the potential to facilitate money laundering or terrorist financing. The regulator emphasised that compliance with AML controls is a fundamental requirement and that the public would expect firms of solicitors to meet these obligations as a minimum safeguard.
The SRA assessed the nature of the misconduct as more serious, noting a pattern of non-compliance across multiple files and shortcomings in training and reinforcement of procedures. While the harm or risk of harm was assessed as low, the combined assessment placed the penalty within Band B under the SRA’s financial penalty guidance.
The agreed fine of £15,568 reflects a reduction from the initial calculation, taking into account the firm’s mitigation and cooperation. No adjustment was required for financial gain, as none was identified.