The Solicitors Regulation Authority (SRA) of the UK has levied a monetary penalty of £232,500 ($315,618) on the law firm Mishcon de Reya LLP for AML failings. The firm will also pay £50,000 ($67,875) towards investigation costs.
Between September 2015 and April 2017, Mishcon de Reya worked for two individual clients, and related corporate vehicles. However, the firm did not retain the hard copy file of customer due diligence (CDD) documents for these clients. Further, even though high-risk jurisdictions were involved, the firm did not conduct enhanced customer due diligence (EDD) and ongoing monitoring. In July 2016, the firm even allowed a client to use their account as a banking facility, allowing one payment of $1.31m into the account, and three payments totaling $1.12m out of the account.
Moreover, the firm’s former partner who worked with these clients had not received the mandatory training required by law. Additionally, the firm failed to provide a firm-wide risk assessment when the SRA requested it in September 2018. A third-party then had to conduct this risk assessment for the firm in March 2019.
Considering these serious breaches of the AML/CFT regulations and the SRA’s rules, a financial penalty was deemed appropriate. However, by assisting the SRA with its investigation and taking corrective measures, the firm has earned the maximum allowable discount of 40%. Consequently, the SRA has reduced the basic penalty of £387,500 ($526,362) to £232,500 ($315,618).