Any law firm doing property, corporate, private client, trusts, tax work etc should make the time to read the SRA’s decision to fine Ferguson Bricknell solicitors £20k for AML failings. 💰
It would be easy to self soothe by jumping on the worst of the problems identified with the anti-money laundering approach but frankly many small to medium sized firms are in similar position on a lot of these issues. They also have:
❌ a firm-wide risk assessment in place now which doesn’t adhere to the detail fo the SRA’s latest guidance. Relying too heavily on templates without sufficient customisation is another common issue
❌ failed to properly update procedures and spot references to the old regs
❌ gaps on some files’ source of funds records
❌ inadequate new matter / client risk assessments
❌ gaps in AML training records
❌ failed to appreciate that when the AML Regulations say that firms should have an audit function in place to check effectiveness of the AML procedures IF appropriate “to the size and nature of” the business, the SRA seem to oddly interpret that as meaning that every single firm subject to the Regulations should have an audit function in place. Surprised how many property firms out there still haven’t had any sort of AML audit.
The maximum this firm could have been fined in the early part of last year without going to the Tribunal would have been 2k! These new fining powers are a huge development. We have certainly seen SRA fines for AML shortcomings but this level of fine for the nature of these problems feels like a serious statement of intent from the regulator. In its consultations on expanding its powers the SRA made little secret of its desire to not simply issue more fines but to issues much more serious fines too. That is what we are now seeing.
I should stress that this post is not simply a question of scaremongering to drum up business! Yes, we do support law firms with anti-money laundering compliance and in particular law firm anti-money laundering (AML) audits. To be frank though, I don’t mind how firms plug these gaps. On our law firm AML audit page we do offer some pointers on how some law firms could even fly solo on their independent AML audits. Whether you let us take the heavy lifting of your hands here or not, do something because Ferguson Bricknell is not so different from many many others out there and the SRA fines and publicity are really stepping up a gear.