Firm fined and ordered to pay costs after years without proper AML policies and risk controls
The Solicitors Regulation Authority (SRA) has fined Stoke-on-Trent law firm Clowes & Co. LLP after finding it failed for several years to implement adequate anti-money laundering (AML) controls and risk assessments required by law.
In a regulatory settlement agreement dated 9 September 2025 and published on 7 October 2025, the firm agreed to pay a £12,787 fine and £600 in investigation costs. The decision follows an SRA investigation triggered by a desk-based review conducted by the regulator’s AML Proactive Supervision Team.
The review and subsequent investigation revealed that Clowes & Co. LLP had no documented firm-wide risk assessment (FWRA) in place between January 2018 and November 2024, despite legal requirements under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017).
The firm was also found to have failed to establish and maintain fully compliant policies, controls and procedures (PCPs) to mitigate and manage the risk of money laundering and terrorist financing from 2018 to January 2025. These failings persisted even after the firm knew it was non-compliant, according to the SRA.
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Under Regulation 18 of the MLRs 2017, all law firms conducting regulated work must identify and assess the risks of money laundering to their businesses. Regulation 19 requires them to maintain written procedures and regularly review them. The SRA said Clowes & Co. breached both obligations over several years.
By failing to comply with these legal requirements, the firm also breached multiple provisions of the SRA Principles and Code of Conduct, including:
- Principle 6 (2011) – acting in a way that maintains the public’s trust in the profession.
- Principle 8 (2011) – ensuring effective business governance and sound financial management.
- Principle 2 (2019) – upholding public trust and confidence in the solicitors’ profession.
- Paragraphs 2.1(a) and 3.1 of the SRA Code of Conduct for Firms (2019) – requiring effective systems, controls, and compliance with law and regulation.
The SRA assessed the misconduct as “more serious”, citing a pattern of prolonged non-compliance that continued after it was known to be improper. It said the failings exposed the firm to potential involvement in suspicious transactions, particularly given that conveyancing work — regarded as a higher money-laundering risk area — forms a significant part of the firm’s practice.
The regulator assessed the risk of harm as medium, noting that while there was no evidence of actual money laundering, the firm’s lack of AML documentation and control left it vulnerable. The combination of seriousness and potential harm placed the matter in Band C of the SRA’s penalty framework, equivalent to a financial penalty of between 1.6% and 3.2% of the firm’s annual domestic turnover.
After applying a mid-range penalty and taking account of mitigating factors, the fine was reduced from a calculated £15,043 to £12,787. The reduction reflected the firm’s cooperation with the investigation and its subsequent efforts to implement compliant AML policies and risk assessments.
The SRA stated that a financial penalty was appropriate to maintain professional standards and public confidence, adding that such sanctions act as a “credible deterrent” to other firms.
“Although there is no evidence of actual harm, the failings had the potential to cause moderate impact by exposing the firm to the risk of facilitating money laundering,” the SRA said. It emphasised that every regulated law firm is expected to comply with anti-money laundering legislation as a minimum safeguard.
The regulator concluded that publication of the agreement was in the public interest, noting that transparency in disciplinary matters promotes confidence in the profession.
Clowes & Co. LLP, based at 20–22 Leek Road, Stockton Brook, Stoke-on-Trent (SRA ID 645074), remains authorised to practise. The firm has since submitted compliant AML policies and controls, which the SRA confirmed meet the requirements of the MLRs 2017.