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Miles Hutchinson & Lithgow faces sanctions for AML failures

Miles Hutchinson & Lithgow faces sanctions for AML failures


The firm has been fined £3,203.20 for prolonged Anti-Money Laundering non-compliance; regulatory breaches undermine public trust

In a recent decision, the Solicitors Regulation Authority (SRA) imposed a financial penalty of £3,203.20 on Miles Hutchinson & Lithgow, situated at 68 Borough Road, Middlesborough, Cleveland, TS1 2JH. The penalty was for the firm's failure to implement adequate measures against money laundering and terrorist financing, as mandated by the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017).

The SRA's Anti-Money Laundering Proactive Team conducted a review in September 2022, revealing significant shortcomings in the firm's compliance. The investigation found the absence of a compliant firm-wide risk assessment (FWRA) and policies, controls, and procedures (PCPs). Additionally, the firm submitted a misleading declaration in January 2020, falsely claiming compliance with MLRs 2017.

The violations continued between 2017 and 2023, with the firm lacking proper PCPs and failing to provide evidence of staff training for in-scope work. While the firm submitted some PCPs in February 2023, full compliance was achieved only by December 1, 2023, and a compliant FWRA was established by November 24, 2023.

The firm faced three specific allegations, resulting in breaches of SRA Principles 2011 and 2019, as well as the SRA Code of Conduct for Firms 2011 and 2019. The sanctions imposed included a financial penalty of £3,203.20 and costs of £1,350.

The decision considered the gravity of the firm's non-compliance, persisting over a prolonged period. The SRA highlighted the firm's disregard for guidance and warnings, emphasizing the potential harm to public interest and confidence in the legal profession. Placed in conduct band C, the financial penalty was calculated at the lower end, acknowledging the firm's subsequent compliance, admissions, and cooperation during the investigation.

This case underscores the critical importance of adherence to anti-money laundering regulations, serving as a reminder for legal practitioners to uphold trust, governance, and compliance in their professional endeavours.