SRA imposes £7,451 fine after AML inspection finds missing client and matter risk assessments
The Merriman Partnership Limited has been fined after a Solicitors Regulation Authority investigation found that the firm failed to carry out required anti-money laundering checks on several conveyancing matters. A regulatory settlement agreement published by the SRA confirms that the recognised body will pay a £7,451 financial penalty, alongside £600 in investigation costs.
The investigation followed an inspection carried out by the SRA’s AML Proactive Supervision Team. According to the settlement document, the regulator reviewed files and identified that in five cases the firm had not completed client and matter risk assessments, which are required under the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017. These assessments are a statutory obligation designed to identify and mitigate potential money laundering risks at the outset of each matter.
The SRA said the absence of these assessments breached several regulatory requirements, including Principle 2 of the SRA Principles, which requires firms to act in a way that upholds public trust and confidence in the solicitors’ profession. The regulator also found breaches of multiple paragraphs of the Code of Conduct for Firms, including those requiring effective governance, adequate systems and controls, and up-to-date compliance with regulatory obligations.
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Although the firm’s framework for risk assessments and policies was otherwise compliant at the time of the inspection, the SRA found that these particular files did not contain the necessary documentation. The regulator noted that the lack of assessments demonstrated insufficient regard for the anti-money laundering rules and the firm’s own procedures.
The settlement states that the firm has taken steps to rectify the issues. These include reviewing all live files within the scope of the money laundering regulations to confirm that completed assessments are now present. The firm also provided refresher training to staff on its risk-assessment template and implemented a process preventing matters from progressing unless a completed assessment is on file.
The SRA acknowledged these remedial actions in its decision, noting that the firm cooperated with the AML Proactive Supervision and AML Investigation teams and admitted the breaches at the earliest opportunity. The regulator also pointed out that, based on the sample reviewed, it had found no evidence of actual money laundering or harm to clients.
In assessing the level of penalty, the SRA applied its published approach to financial sanctions. It categorised the misconduct as more serious because the failures indicated a disregard of statutory obligations and created potential risk in a high-risk practice area. Conveyancing is regarded as a significant money laundering risk due to the movement of large sums through property transactions.
The impact of the breach was assessed as low, partly because the firm already had an AML control environment in place and the issues were limited to specific files rather than a systemic failure. Under the SRA’s penalty guidance, the case fell into Band B, resulting in a starting figure of £8,766. This was reduced to £7,451 in recognition of mitigating factors.
The settlement notes that the firm did not financially benefit from the breaches, and no further adjustment was required. The SRA confirmed that publication of the agreement was appropriate in the public interest and consistent with transparency within the regulatory process.
Under the terms of the agreement, the firm has accepted the findings and agreed not to act inconsistently with the admissions made. Any attempt to deny the admissions could lead to further regulatory action.
The regulatory settlement formally concludes the SRA’s investigation into the matter.