Firm admitted AML risk assessment breaches and agreed to pay investigation costs
KTP Solicitors has agreed to pay a financial penalty of £5,617 after an investigation by the Solicitors Regulation Authority (SRA) found the firm had failed to maintain an adequate firm-wide risk assessment for anti-money laundering (AML) purposes over an extended period.
The regulatory settlement agreement, dated 15 July 2026 and published on 28 July 2026, followed a desk-based review carried out by the SRA’s AML Proactive Supervision Team. The regulator also ordered the firm to pay £600 towards the cost of its investigation.
According to the SRA, KTP Solicitors did not have an adequate assessment of the money laundering and terrorist financing risks faced by its business, commonly known as a firm-wide risk assessment (FWRA), between 26 June 2017 and 2 June 2026. The regulator said this meant the firm failed to comply with Regulations 18(1) and 18(2) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
The SRA concluded that the firm also breached provisions of both the former SRA Handbook and the current SRA Standards and Regulations during the relevant periods. Those included failures to maintain effective systems and controls, comply with applicable legislation, uphold public trust and confidence, and ensure appropriate governance arrangements.
For solicitors and law firms, the decision reinforces that maintaining a compliant and up-to-date firm-wide risk assessment is a continuing regulatory obligation under the 2017 Money Laundering Regulations. The SRA’s findings make clear that having other AML procedures in place does not remove the requirement to maintain an adequate FWRA that properly assesses the firm’s exposure to money laundering and terrorist financing risks.
The firm admitted the breaches as part of the regulatory settlement. In mitigation, the SRA acknowledged that KTP Solicitors had reviewed and amended its FWRA, cooperated with both the AML Proactive Supervision Team and the AML Investigation Team, and that there was no evidence of harm to clients.
Despite those mitigating factors, the regulator said the firm’s conduct demonstrated a disregard for its statutory and regulatory obligations and created the potential for harm because the absence of a compliant AML control environment left the practice susceptible to money laundering and terrorist financing risks.
When assessing the appropriate sanction, the SRA considered the conduct to be more serious, giving it a nature score of three. It said the non-compliance formed part of a pattern of misconduct spanning almost nine years and concluded the firm’s conduct resulted from recklessness, noting the firm believed its FWRA was compliant but would have reached a different conclusion had it sufficiently considered the regulations and available guidance. The regulator assessed the risk of harm as low because the firm had relatively comprehensive policies, controls and procedures and there was no evidence of direct client loss or actual harm.
The matter fell within Band B of the SRA’s fining guidance. The regulator calculated a basic penalty of £6,608, which it reduced to £5,617 to reflect the mitigating factors. It also found the firm had not obtained any financial gain from the misconduct, so no further adjustment was required. Under the agreement, KTP Solicitors also consented to publication of the outcome and agreed to pay the SRA’s investigation costs of £600.