An East London law firm has recently been fined by the Solicitors Regulation Authority (SRA) due to its lack of compliance with anti-money laundering (AML) regulations.
Edell Jones & Lessers, a law firm based in East London, has been fined £3,711 in a regulatory settlement with the SRA. This settlement also includes additional costs amounting to £600. The firm’s work primarily involves commercial conveyancing, residential conveyancing, and probate, sectors that are inherently at risk for money laundering activities according to the SRA.
The SRA’s findings indicated that from June 2017 to January 2020, the firm did not have the necessary firm-wide risk assessment (FWRA) or the policies, controls, and procedures (PCPs) to manage identified risks effectively. While there was no direct harm caused to clients, the lack of adequate measures could have facilitated dubious transactions.
Post-January 2020, although Edell Jones & Lessers introduced some form of FWRA and PCPs, these measures were insufficient until compliant documentation was finally submitted in April this year. Additionally, the firm failed to conduct proper client and matter risk assessments from June 2017 to February 2024.
The SRA report critiques the firm’s conduct as a disregard for statutory and regulatory obligations, emphasizing that this failure had the potential to aid in money laundering and possibly terrorist financing. The imposition of a fine serves the public interest, acting as a deterrent to prevent similar non-compliance by other firms.
In determining the penalty, the SRA took into account the firm’s total annual domestic turnover of £171,802, calculating the fine at 2.4% of this figure before applying a 10% discount. This reduction recognized the firm’s eventual cooperation and compliance with the investigation.
While recent months have seen numerous cases resolved without escalation to the Solicitors Disciplinary Tribunal, the possibility remains open. This week, the SRA announced that Amir Nazir Butt of ANB Law in Peterborough would face the tribunal, with allegations not limited to AML issues. The charges against him include failure to maintain an FWRA, PCPs, or adequate AML training, alongside other accusations relating to false declarations and mismanagement of client funds. These serious allegations are awaiting a tribunal hearing for resolution.
The actions taken by the SRA underscore the critical importance of robust AML compliance within legal firms, serving as a warning to others about the consequences of neglecting regulatory responsibilities.
