Castle Sanderson Limited fined after SRA finds prolonged AML compliance failures
A Leeds-based law firm has been fined more than £10,000 after admitting serious and long-running failures to comply with anti-money laundering requirements, following an investigation by the Solicitors Regulation Authority (SRA).
Castle Sanderson Limited, a recognised body authorised and regulated by the SRA, entered into a regulatory settlement agreement dated 20 January 2026. The outcome was published on 9 February 2026 and brings the regulator’s investigation to a conclusion.
Under the agreed outcome, the firm will pay a financial penalty of £10,462 and £600 towards the SRA’s investigation costs. The firm also agreed to the publication of the settlement in line with the regulator’s disciplinary rules.
The investigation followed an inspection by the SRA’s AML Proactive Supervision Team. That inspection identified multiple areas of concern relating to the firm’s compliance with the Money Laundering Regulations 2017 and the SRA’s regulatory frameworks in force both before and after November 2019.
The SRA found that between 26 June 2017 and 27 May 2025 the firm failed to regularly review and update its policies, controls and procedures designed to mitigate the risks of money laundering and terrorist financing. These failings were linked to deficiencies in the firm-wide risk assessment and amounted to a breach of Regulation 19 of the 2017 regulations.
In addition, the regulator identified that in 34 files the firm failed to carry out client and matter risk assessments as required by Regulation 28. The absence of these assessments meant that appropriate scrutiny was not applied at file level, particularly in conveyancing matters, which the SRA considers to be inherently high risk.
The firm admitted the breaches. For conduct up to 24 November 2019, the admissions included failures under the SRA Principles 2011 and the SRA Code of Conduct 2011, including obligations to maintain public trust, comply with regulatory requirements, and operate effective systems and controls. For conduct continuing from 25 November 2019 onwards, the firm admitted breaches of the SRA Principles 2019 and the SRA Code of Conduct for Firms, including failures in governance, record-keeping, and compliance with applicable law.
In deciding that a financial penalty was appropriate, the SRA took into account mitigating factors. These included early admissions, cooperation with the regulator, and steps taken by the firm to remedy the failings. The firm has since implemented compliant policies and procedures, delivered staff training, reviewed live files for completed risk assessments, and updated its firm-wide risk assessment.
However, the SRA concluded that the conduct showed a disregard for statutory and regulatory obligations and had the potential to expose the firm to misuse for money laundering or terrorist financing. Given the firm’s focus on conveyancing and the duration of the non-compliance, the risk of harm was assessed as medium.
Applying its published guidance, the SRA assessed the nature and impact of the misconduct as placing the penalty in Band C. The final fine reflected mitigation and the absence of evidence of financial gain or direct client harm.
The SRA said publication of the agreement was in the public interest to promote transparency and maintain confidence in the regulation of legal services.