The Solicitors Disciplinary Tribunal has cleared Candey Limited of misconduct allegations regarding anti-money laundering checks on a £20 million transaction.
- Candey Limited faced accusations from the Solicitors Regulation Authority (SRA) for allegedly failing to conduct required diligence for a high-value transaction.
- The Tribunal ruled that enhanced due diligence was not mandatory, and thus, no breach occurred.
- The case highlights ongoing challenges faced by the SRA in proving misconduct related to anti-money laundering regulations.
- Candey Limited criticizes the SRA’s handling of the case, deeming it a time and cost-consuming process.
The Solicitors Disciplinary Tribunal has recently ruled in favour of Candey Limited, a City law firm, effectively clearing the firm of any misconduct allegations made by the Solicitors Regulation Authority (SRA) concerning anti-money laundering (AML) checks. The case revolved around a high-value transaction worth over £20m involving a piece of agricultural land.
Richard Morris, a former partner at Candey Limited, acknowledged that he did not carry out adequate checks on the client involved. Nevertheless, he was exonerated from authorising payments or using the client account as a banking facility. This is the second instance this year where the SRA failed to substantiate its claims of misconduct by a firm concerning compliance with money laundering regulations. In a similar case in June, the SRA was obliged to cover its £189,000 costs after allegations against another firm were dismissed.
The SRA contended that Candey Limited had failed to obtain adequate information on the source of funds involved in the transaction. The Tribunal heard that the instruction on this sale was given in 2015, pertaining to a client associated with a convicted fraudster. However, this individual was not a client of Candey Limited nor provided any instructions. A sum of £24m was received into the client account to facilitate the completion of the transaction.
The Tribunal chair, Paul Lewis, clarified that the requirement for enhanced due diligence was not mandatory as per the rules at the time of the transaction. Richard Morris, in his statement, expressed remorse, admitting to an inadvertent mistake but emphasised the absence of any dishonesty or intentional misconduct on his part. Morris highlighted his hard-working nature, yet noted his lack of experience during that period.
Morris advocated for better communication from the SRA regarding money laundering regulations, stating that the profession was not fully aware of the 2015 rule’s implications. The Tribunal made no cost order concerning Candey Limited, effectively leaving both parties to bear their costs. Morris was fined £6,000 and ordered to pay £10,000 in costs.
Following the decision, Candey Limited expressed regret over the SRA’s lack of engagement on substantive case details, stating that substantial time and costs could have been saved. Christopher Convey, representing Candey Limited, remarked on the difficulties posed by the SRA’s approach, terming the case as potentially flawed from its inception.
The Tribunal’s decision serves as a significant precedent regarding the scope and application of AML regulations within legal practices.
