SRA penalises law firm after investigation revealed multiple AML compliance failures
A law firm has agreed to pay a financial penalty of £21,188 after an investigation by the Solicitors Regulation Authority (SRA) identified failures to comply with anti-money laundering regulations.
The SRA published the regulatory settlement agreement involving Hattens Solicitors Limited, a licensed body based in Grays, Essex, on 8 June 2026. The agreement was reached on 26 May 2026 following an investigation prompted by an inspection carried out by the regulator’s Anti-Money Laundering (AML) Proactive Supervision team.
According to the SRA, the inspection and subsequent investigation identified concerns relating to the firm’s compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as well as the SRA Principles and the SRA Code of Conduct for Firms.
The regulator found that, in three client files, the firm failed to carry out appropriate customer due diligence measures, including adequate scrutiny of transactions and, where necessary, checks relating to the source of funds. The SRA also identified four files in which client and matter risk assessments had not been conducted. In a further four files, the firm failed to follow or implement its own policies, controls and procedures.
As part of the agreement, Hattens Solicitors Limited admitted that its failures breached provisions of the SRA Code of Conduct for Firms and Principle 2 of the SRA Principles, which requires firms to act in a way that upholds public trust and confidence in the solicitors’ profession and in legal services.
The SRA said the firm has since taken steps to address the issues. These measures include updating its firm-wide risk assessment, revising policies and procedures, providing staff training on source-of-funds checks and risk assessments, registering as a provider of tax adviser services, and arranging an independent audit scheduled for later this year.
In explaining the sanction, the regulator stated that the conduct demonstrated a disregard for statutory and regulatory obligations and created potential risks by leaving the firm more vulnerable to money laundering and terrorist financing threats. The SRA also noted that the firm had previously been fined in 2023 for separate breaches of the same regulations identified during an earlier inspection.
The regulator assessed the firm’s conduct as more serious because it showed a persistent failure to meet regulatory obligations. However, it also took into account the firm’s cooperation, remedial actions and early admissions when reducing the penalty from a calculated basic figure of £24,928 to £21,188.
In addition to the fine, Hattens Solicitors Limited agreed to pay £600 towards the SRA’s investigation costs.