The firm was fined and ordered to pay costs due to 'reckless' non-compliance
A law firm based in Bracknell, Berkshire, Fairbrother & Darlow, has been fined £16,052.80 by the Solicitors Regulation Authority (SRA) for failing to comply with Anti-Money Laundering (AML) Regulations, according to a report by The Law Society Gazette.
The firm was also ordered to pay costs of £1,350 due to what has been described as "reckless" non-compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The fine represents a percentage of the firm's turnover, reflecting the severity of the breach.
In March 2022, the SRA's anti-money laundering proactive team conducted a desk-based review of the firm's compliance with AML regulations. The review revealed significant shortcomings, including the absence of a compliant firm-wide risk assessment and the necessary policies, controls, and procedures to prevent money laundering. Furthermore, the investigation uncovered that four in-scope client files lacked proper client or matter risk assessments despite the firm engaging in relevant legal work since 2010.
The SRA emphasized the seriousness of the firm's conduct, noting it "demonstrated a pattern of non-compliance" that persisted unreasonably long and "had the potential to cause serious harm to the public interest and public confidence in the legal profession." The authority criticized Fairbrother & Darlow for not adhering to SRA guidance and warning notices, which outline the requirements for AML compliance, the risks of non-compliance, and the regulatory consequences.
The decision to fine the firm was based on a calculation of 1.6 percent to 3.2 percent of its annual domestic turnover, indicating the SRA's assessment of the conduct as being of "mid-range" severity.
Despite the breach, the SRA acknowledged several mitigating factors in its final judgment. These include the absence of significant harm caused by the non-compliance, the firm's admissions and cooperation with the regulatory investigation, and rectifying the breaches by May 2023.
