The Solicitors Regulation Authority (SRA) has exercised its new fining powers by imposing a £5,000 penalty on a North Yorkshire law firm for six years of anti-money laundering (AML) failures. Goad & Butcher, based in Settle, has also had conditions placed on its authorisation after previous attempts to bring it into compliance were unsuccessful.
The SRA cited the firm’s failure, since June 2017, to have in place a documented and compliant firm-wide risk assessment, or compliant policies, controls, and procedures (PCPs), as required by the 2017 Money Laundering Regulations. The regulator noted that this failure was compounded by the firm’s noncompliance with the terms of a compliance plan agreed with the SRA in June 2021.
According to the SRA, Goad & Butcher’s conduct constitutes a “wilful breach of its regulatory obligations which has persisted for more than five years” and has the potential “to cause significant harm to the public interest and to public confidence in the legal profession.” As a result, the SRA has deemed it necessary to impose conditions on the firm’s authorisation in order to monitor its compliance with the 2017 regulations.
“The long-standing and persistent nature of Goad & Butcher’s failure to comply with the MLRs 2017 indicated that its breaches related to systemic issues within the firm,” the SRA said. “Its conduct is likely to be repeated in the absence of conditions. This is demonstrated by its failure to ensure compliance since 26 June 2017 despite the engagement and support provided by the SRA to assist it to comply.”
Under the imposed conditions, the firm must produce a revised and compliant firm-wide risk assessment, update its AML PCPs, and provide them to the SRA within a month. The SRA has cautioned that it will not hesitate to take further regulatory action if the firm fails to comply with the imposed conditions or commits any additional regulatory breaches.
In recent years, the SRA has stepped up its enforcement efforts in relation to AML compliance. The regulator has implemented a more risk-based approach to AML supervision and enforcement, and has introduced new powers to impose fines and conditions on firms that fail to comply with their AML obligations.
As a result, law firms are under increasing pressure to ensure they have robust AML policies, procedures, and controls in place. Failure to do so not only carries the risk of regulatory sanctions, but also reputational damage and potential loss of clients.
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Rudi Kesic, CEO at Verify 365, commented on the importance of AML compliance: “Firms must take AML compliance seriously, not only to avoid regulatory action but also to protect their reputation and client base. Our technology platform provides a solution for firms to ensure they have robust AML controls in place, while also streamlining the onboarding process for clients.”
With the increasing emphasis on AML compliance, it is essential that law firms take steps to ensure they are meeting their obligations. By implementing the right policies, procedures, and controls, and utilising technology solutions such as Verify 365, firms can protect themselves against regulatory breaches and safeguard their reputation and client base.
