On 26 June 2015, the Solicitors Regulation Authority (SRA) announced that it had completed its audit of anti-money laundering procedures at law firms. Early findings suggest that only a small proportion of firms require a follow-up visit.
Since September 2014, the SRA visited over 500 firms that it had identified as being at risk from money laundering attempts. It examined whether or not they had effective checks and balances in place to detect any suspicious activity, and that staff were aware of these systems and knew how to use them. This campaign was in line with the SRA’s 2014-2015 risk outlook, which identified money laundering as a key risk to the industry.
As part of this process, the SRA published a “warning note on appropriate anti money laundering processes,” “guidance on how to complete suspicious activity reports,” and a “warning notice emphasising that firms should not allow their client account to be used as a bank account.”
During this process, we heard from a number of clients who presented the SRA with AML training reports from the Compliance Learning Management System. The SRA was satisfied with the reports and the level of training all staff received from the new VinciWorks Anti-Money Laundering training.
However, it is important to note, that a Financial Action Task Force (FATF) audit is expected soon.
FATF identified 42 red flags for law firms in its 2013 report Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals. These red flags focus on due diligence around clients, source of funds, choice of lawyer and the nature of the retainer. The previous FATF audit was in 2007.
Train your firm on the SRA Accounts Rules in 30 minutes
VinciWorks – the leader in online compliance learning – has just released a new, 30-minute interactive course to brush up on the SRA Accounts Rules.
The course provides an overview of the key definitions, explains the rules that impact day-to-day work, and tests understanding with real-life scenarios. It digests the rules into concise principles and clarifies how client and firm money should be handled. The course is designed for fee earners, support staff and anyone else involved in handling client money.
Why is this important for you?
According to Rule 6, Non-compliance by any member of staff will also lead to the principals and COFA being in breach of the rules. Serious breaches will be referred to the Solicitors’ Disciplinary Tribunal (“SDT”) whose findings are published. The SDT and the SRA have the power to impose fines or other restrictions on any member of staff (not just solicitors).
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A large international firm with over 500 lawyers in 11 countries approached VinciWorks with a problem. Its employees are required to complete mandatory AML training every year. To facilitate this requirement, the firm set up easy online access to courses, and sent emails with login details and clear instructions for how to complete the training to everyone at the firm. Yet, despite their efforts to make compliance with this policy easy, course completion rates were alarmingly low.
After 3 months, only 13.6% of the firm had completed the training.
With this completion rate, the firm risked non-compliance with the regulatory requirement to train employees on the regulations and risks related to money laundering.
VinciWorks helped the firm implement the advanced features in the VinciWorks Legal Learning Management System Pro Edition, and after only three months, course completion rates tripled!
CLICK HERE TO SEE HOW WE DID IT:
Cybercrime issues affecting solicitor firms are increasing the Solicitors Regulation Authority (SRA) has revealed.
More and more reports are being received of firms either being contacted by con artists or falling victim to fraudulent activity, with potentially serious consequences for clients buying or selling property. The SRA is urging solicitors to step up their efforts to keep criminals out and protect client interests.
The majority of recent scams fall into two categories:
- Firms receiving calls pretending to be banks to obtain sensitive information, such as account passwords
- Emails between firms and clients being intercepted, leading to client funds being paid into fraudsters’ accounts
This is against a backdrop of continued instances of con artists pretending to be solicitors, using either fake names or stealing the identities of genuine firms.
Read more on SRA website