City Heights Legal Solutions Limited, a recognised body authorised and regulated by the Solicitors Regulation Authority (SRA), has agreed to pay a financial penalty following an investigation into its compliance with anti-money laundering (AML) regulations. The fine has been confirmed following a thorough investigation prompted by an inspection, which uncovered a series of breaches from the company ranging from a non-compliant firm-wide risk assessment to failing to maintain adequate PCPs. The SRA has fined City Heights Legal Solutions £2,387 and ordered them to cover investigation costs totalling £600.
This news offers a stark reminder to all legal sector businesses about the importance of having effective AML and due diligence procedures in place. While breaking down the latest fine, we also analyse how Verify 365 is helping law firms and businesses working within the legal sector ensure they have effective AML procedures in place to mitigate risk, prevent fraud and practice compliantly within the SRA guidelines.
City Heights Legal Solutions Fined – Financial Penalty and Costs
Firm-Wide Risk Assessment Concerns and Other Breaches
From 26 June 2017 to November 2020, the firm did not have a documented firm-wide risk assessment. Even after November 2020, the FWRA provided was not compliant with the regulations until a suitable document was submitted in August 2023. The firm’s initial submission was a business continuity plan rather than a proper FWRA, leading to further non-compliance.
From June 2017 to February 2024, City Heights Legal Solutions Limited failed to maintain adequate PCPs to mitigate money laundering and terrorist financing risks, breaching Regulation 19 of the MLRs 2017. The firm’s initial PCPs were found lacking during inspections in October 2020 and March 2023, and were only brought into compliance in February 2024.
The firm failed to conduct client and matter risk assessments between June 2017 and August 2023. An inspection revealed the firm was using an inadequately tailored risk assessment template, resulting in poor risk evaluations. City Heights Legal Solutions Limited also failed to provide appropriate AML training to all relevant employees between June 2017 and July 2023. The firm’s staff only received the necessary training after the SRA’s intervention.
The firm admitted to breaching several SRA Principles and Codes of Conduct due to its failure to comply with the MLRs 2017. These breaches included failing to maintain public trust and proper governance and failing to establish effective systems and controls.
The SRA determined that a financial penalty was appropriate due to the firm’s disregard for statutory and regulatory obligations, which had the potential to facilitate money laundering or terrorist financing. However, there was no evidence of harm to consumers or third parties, and the firm has since shown remorse and cooperation, with a low risk of recurrence.
Let Verify 365 Enhance Your Due Diligence Processes and Avoid Fines
The SRA’s decision to fine City Heights Legal Solutions Limited serves as a reminder to all solicitors of the importance of complying with AML regulations. The penalty aims to act as a deterrent, emphasising the risks to the public and the legal sector when firms fail to uphold their regulatory duties.
Verify 365 ensures law firms across England and Wales are able to complete the necessary due diligence to ensure they can verify their client’s information and remain compliant with the set SRA guidelines. Our innovative client onboarding technology ensures you can complete biometric ID checks, address verifications, source of funds checks, property searches, KYB checks and more.
Our comprehensive fast ID checks, using our innovative DynamicID enables you to confirm the identity of an individual within a few minutes. Using facial recognition, liveness scanning and NFC technology, you can comprehensively confirm the identity of your client. For more enhanced due diligence processes, Verify 365 ensures you can complete address verifications and source of funds checks.
Prove the address of your clients by capturing images of legal documents such as utility bills, mortgage statements, bank statements, invoices and more. These documents will enable you to fully confirm your client lives where they say they do. Our comprehensive source of funds checks ensures you can mitigate risk, prevent fraud and complete the due diligence process. We’ve combined open banking technology and advanced AI analytics so you can analyse financial data, identify any anomalies and decipher where the funds have come from.
Keen to see Verify 365 in action, why not speak with our expert team today by booking a comprehensive, free demo where our team will show you exactly how our amazing technology can transform your processes and ensure you can complete enhanced due diligence.