Francis Mathew and the firm face severe penalties for mishandling client funds and breaching anti-money laundering laws
In a shocking development, Law and Lawyers Limited, a recognised legal firm, and its director, Francis Mathew, have been slapped with hefty fines following a damning ruling by the Solicitors Disciplinary Tribunal (SDT). The penalties come after a series of breaches related to client money mishandling, poor client account reconciliations, and failures to comply with anti-money laundering regulations.
Both Mathew and the firm now face heavy consequences, including fines and significant restrictions on their professional roles.
The Solicitors Regulation Authority (SRA) launched an investigation into the firm in 2022, revealing a string of serious issues that included a shocking £40,636.08 shortfall on the client account. The shortfall resulted from payments made across 423 separate client matters. Additionally, the firm held onto a staggering £287,821.46 in residual client balances, which remained unreturned for over a year.
Embed from Getty ImagesThe firm had also failed to complete client account reconciliations in a timely manner, a breach of the SRA Accounts Rules, leading to inaccurate records and unresolved client money issues. On top of that, the firm was found guilty of breaching anti-money laundering regulations, as it failed to carry out adequate source of funds checks on multiple client transactions. This left the firm vulnerable to potential money laundering, a serious violation of professional conduct.
Francis Mathew, who held numerous senior positions within the firm—including Compliance Officer for Finance and Administration (COFA) and Money Laundering Reporting Officer (MLRO), was found personally responsible for many of the firm’s failings. The SDT ruled that Mathew had recklessly provided inaccurate information to the SRA, falsely declaring that the firm’s risk assessment was compliant with anti-money laundering laws when it was not.
The Tribunal’s ruling outlined that, although no clients were financially harmed, the breaches were deemed to have caused significant reputational damage to the profession. The firm’s failures were particularly alarming given its role in areas susceptible to money laundering, such as residential conveyancing. Despite the lack of direct client loss, the firm’s actions were considered reckless, with potential risks to the public at large.
Following the Tribunal’s findings, both the firm and Mathew were fined £25,000 each.
However, the severity of Mathew’s misconduct warranted further sanctions. In addition to his fine, Mathew has been subject to a Restriction Order, prohibiting him from holding key compliance roles—such as COFA, MLRO, or Compliance Officer for Legal Practice, without prior approval from the SRA.
The fine and restrictions serve as a stark warning to other legal professionals about the importance of maintaining rigorous financial controls and adhering to anti-money laundering regulations. Both Mathew and the firm have expressed remorse and taken steps to rectify their mistakes, including appointing new compliance officers and implementing updated procedures to ensure future compliance.
The case highlights the critical need for firms to uphold the highest standards of legal practice, not just for the protection of clients, but to preserve public trust in the legal profession as a whole. Despite the serious breaches, the Tribunal recognised Mathew’s contributions to his community, citing his charity work and personal sacrifices, including donating a kidney in 2015. These factors, however, did little to mitigate the severity of his professional missteps.
