SRA Fined £16k Penalty To Berkshire Firm For Its AML Compliance Failures

Bracknell firm Fairbrother & Darlow is issued with a £16,000 penalty note for its AML compliance inadequacies by the Solicitors Regulation Authority.

Berkshire Company has now joined the long list of firms fined several percent of its total turnover for its shortcomings in conducting a firm-wide risk assessment in money laundering since SRA introduced compliance guidelines for thousands of companies in January 2024.

The firm, Fairbrother & Darlow, which is based in Bracknell, was directed by the Solicitors Regulation Authority to pay a fine of £16,052.80 and costs of £1,350. This was after the regulator conducted a desk-based review almost two years ago to assess their compliance with the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017.

Drawbacks Of Berkshire Company For Compliance

The team concluded that there were no proper firm-wide risk assessment or policies, control and procedures implementation and four files in scope did not have client risk assessment.

Fairbrother & Darlow signed an online declaration in January 2020 admitting it was compliant as per the regulations of 2017 with SRA confirming the declaration by saying that it had been done in the “mistaken belief” that the firm was compliant. It was spring 2023 when the firm finally followed the requirements while the regulations had already taken effect six years earlier, according to legal news sources.

The SRA said it acted for the breach of rules that was sustained for much longer than acceptable. The regulator also said, “The pattern of noncompliance that was shown and the behavior was demonstrated irresponsibility.”

SRA Regulatory Guidelines 2024

On 29 Jan 2024, in its compliance regulations, SRA issued letters to more than a thousand law firms that couldn’t help but admit that they lack key internal controls, and responded to implement strong AML systems to prevent sanctions this year.

SRA emphasizes that the assessed entity will have to undergo desk-based reviews of its controls later in the year. This feature is required for all current sanction monitoring systems.

Juliet Oliver, SRA deputy chief executive, said: ‘The process of financial sanctions regime building is one of the main parts of the state strategy in response to the war in Europe and lawyers have the key competency in its fight as well’.

SRA indicated that “the liability is strict for those firms to ensure their compliance to the regime on sanction”.

The SRA Reviews For Fairbrother & Darlow

UK regulatory says, “The firm did not properly heed the SRA’s guidance lines and warning notices that explained what was needed, the risks associated with non-compliance, and the regulatory consequences of the failure to comply.”

The breach was

“serious, and therefore could have led to serious damages to the public interest and people’s confidence in the legal profession”.

According to the SRA, this kind of misconduct places the guilty firm in the middle-range “bracket” of offenses, where 1.6 percent to 3.2 percent of the domestic turnover had been levied if there were compliance failures.

In the reduction of such crimes, SRA acknowledges that the negligent acts of the firm were not severe, in this connection the firm admitted a breach, cooperated with the investigation, and remedied the violations.