Law firm slammed with £173k fine after failing to spot foreign politically exposed client

Taylor Vinters fined for failing to check PEP status during 2017 property purchase

Taylor Vinters LLP, a Cambridge-based law firm now merged with Mishcon de Reya, has been fined nearly £173,000 by the Solicitors Regulation Authority (SRA) for failing to carry out crucial checks on a foreign client identified as a politically exposed person (PEP) during a 2017 residential property transaction.

The SRA found that the firm breached money laundering regulations by neglecting to obtain senior management approval before establishing a business relationship with the client. Taylor Vinters also failed to determine the source of the client’s wealth and funds and did not implement adequate monitoring during the course of the relationship.

Under the regulations in force at the time, any firm dealing with a non-domestic PEP was obligated to apply enhanced due diligence. Despite this, Taylor Vinters did not realise the client’s PEP status until two months after the property deal was completed.

In a particularly troubling lapse, the firm had previously supplied incorrect information to another firm involved in the transaction, stating that the buyer’s identity had been verified—when in fact, it had not.

Taylor Vinters admitted its failings, including non-compliance with anti-money laundering legislation and poor internal governance. The SRA emphasised that firms have a duty to provide accurate information and to protect the public from the risk of money laundering or terrorist financing.

“The failure to follow proper due diligence exposes firms to serious regulatory and criminal risks,” the SRA said in its ruling. “It is in the public interest that legal practices ensure strict compliance with the money laundering regulations.”

The initial fine was calculated at around £247,000, but this was reduced to £172,934 to reflect the firm’s early admission of wrongdoing and full cooperation with the SRA’s investigation. The regulator also noted that Taylor Vinters did not financially benefit from the breach.

Because Taylor Vinters operated as an alternative business structure, the SRA had the authority to exceed its typical £25,000 fining limit. Alongside the fine, the firm must pay £1,350 in investigation costs.

Responding to the decision, a spokesperson for Mishcon de Reya said: “The SRA has announced a fine against Taylor Vinters relating to errors made in 2017 under their legacy systems. We are pleased the SRA reduced its basic fine to account for early admissions and full cooperation with the investigation.”

This is not the first time Taylor Vinters has found itself penalised for similar issues. In 2020, the firm accepted a £20,000 fine following a regulatory settlement agreement over failures in due diligence involving multiple foreign investor clients. On that occasion, it admitted to four breaches of anti-money laundering rules.

The SRA continues to intensify its scrutiny of firms that fall short in complying with AML protocols, particularly when politically exposed clients are involved. PEPs—often linked to public functions in foreign jurisdictions—are considered higher risk because of their potential connection to corruption or illicit finance.

This latest ruling stands as a stark reminder that legal practices must identify and monitor PEPs diligently. Failure to do so could expose firms not only to large financial penalties but to reputational damage that lasts long after the case is closed.