Law firm fined £11,676 over anti-money laundering compliance failures
The Solicitors Regulation Authority (SRA) has fined Hampshire-based firm Mackarness & Lunt following an investigation into its compliance with anti-money laundering (AML) requirements, concluding with a regulatory settlement agreement published earlier this week.
The regulator confirmed that the outcome was reached by agreement after concerns were identified during a desk-based review carried out by its proactive supervision team. The investigation focused on the firm’s compliance with obligations under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, alongside the SRA’s Principles and Codes of Conduct.
According to the published decision, the firm failed over a number of years to adequately review and update its policies, controls and procedures relating to AML compliance. The SRA also found that the firm did not maintain an up-to-date firm-wide risk assessment identifying the money laundering and terrorist financing risks relevant to its business.
As part of the agreed outcome, Mackarness & Lunt accepted the findings and agreed to pay a financial penalty of £11,676, together with investigation costs of £600. The agreement was published in accordance with the SRA’s regulatory and disciplinary rules, which emphasise transparency where enforcement action is taken in the public interest.
The regulator said the failures represented a disregard of statutory and regulatory obligations and created the potential for harm by leaving the firm exposed to money laundering risks. However, the decision also noted mitigating factors, including the firm’s cooperation with the investigation, early admissions, and steps taken to improve its AML control environment following regulatory engagement. The SRA further recorded that there was no evidence of direct harm to clients arising from the breaches.
In determining the sanction, the SRA applied its enforcement strategy and financial penalty guidance, concluding that a fine was an appropriate and proportionate response. The regulator stated that financial penalties can serve to maintain professional standards and uphold public confidence in the legal profession where regulatory failings are identified.
The decision forms part of the SRA’s ongoing supervisory work in relation to AML compliance across the legal sector, where firms handling client money and transactional work are expected to maintain effective governance, risk assessment procedures and internal controls to meet regulatory requirements.