SRA fines rise as 46 firms penalised for failures to meet basic anti-money laundering rules
The Solicitors Regulation Authority has imposed £550,000 in anti-money laundering fines over the past three months after identifying widespread failures among law firms to comply with the 2017 Money Laundering Regulations. Forty-six firms across England and Wales were sanctioned during this period, with most penalties arising from the absence of firm-wide risk assessments and inadequate policies, controls and procedures. The regulator also highlighted routine failures to carry out client and matter risk assessments.
In many cases, the SRA reduced the fines it had calculated under its guidance to £25,000, the maximum it can impose directly on traditional law firms. This avoided the need to refer firms to the Solicitors Disciplinary Tribunal. The regulator has issued a steady stream of AML fines in recent years after repeatedly finding that firms cannot demonstrate compliance with core obligations.
Only one firm received a fine above the £25,000 threshold. CGM Hampshire, an alternative business structure based in Southampton, was fined £31,045 after failing to maintain a firm-wide risk assessment for seven years. ABSs fall within a different legislative framework, which allows the SRA to impose much higher penalties.
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Seven traditional firms had initial fines above the £25,000 cap reduced to the maximum. Elmhirst Parker in Barnsley received the highest calculated penalty at £41,000 after the SRA found it had no adequate AML policies, controls or procedures and had not carried out client and matter risk assessments. The practice was acquired earlier this autumn by Pepperrels. Carter Lemon Camerons, a City firm, had an initial penalty of £39,500 after failing to complete client and matter risk assessments.
A Legal Futures investigation earlier this year noted that many firms fined for AML breaches hold either Conveyancing Quality Scheme or Lexcel accreditation. Thirty-five of the 46 firms fined in the latest period were CQS members and four also had Lexcel, raising questions about the scrutiny applied to compliance under both schemes.
Separately, the SRA fined Mayfair firm Charles Douglas Solicitors £23,588 after finding that it did not take adequate measures to establish the source of wealth or funds of a non-domestic politically exposed person. The firm acted for the client across 194 matters between June 2021 and February 2024, primarily involving residential property purchases and refinancing. The SRA said the firm received more than £10m in numerous transactions but could not evidence adequate checks on remitting parties representing less than one per cent of the total funds.
The regulator said Charles Douglas had gathered substantial financial information but did not carry out further enquiries after the financial statements of the client’s overseas interests raised concerns. While no funds from those business interests were remitted, the SRA found that the firm had not fully met the enhanced due diligence required for non-domestic PEPs. The basic penalty was calculated at £31,451 and reduced by 25 per cent to reflect early admissions and cooperation.