Huddersfield-based Holden Smith Law has been fined over £36,000 by the Solicitors Regulation Authority (SRA) for failing to meet anti-money laundering (AML) obligations. The penalty came following a thorough investigation that uncovered serious compliance failures over a five year period.
What happened?
The Solicitors Regulation Authority (SRA) investigated the firm’s AML practices and uncovered a consistent failure to carry out client and matter risk assessments between February 2019 and November 2024. A sample review of eight client files revealed not a single compliant risk assessment—despite clear regulatory requirements.
This oversight was especially significant because Holden Smith Law handles a high volume of conveyancing work—an area flagged by regulators as being at high risk for money laundering. The firm had also failed to follow published guidance on how to avoid breaching MLRs, the most recent of which was in October 2023.
The penalty and mitigating factors
While the firm cooperated fully with the investigation and has since brought its processes into compliance, the SRA pointed to a ‘pattern of behaviour’ that showed disregard for statutory duties. Crucially, the failures could have enabled suspicious transactions to slip through the cracks that could have caused harm and led to money laundering—something thorough risk assessments on in-scope matters are designed to prevent.
Holden Smith Law admitted the breaches and accepted the findings. Though the original fine was set at over £52,000, it was reduced to £36,623 due to mitigating factors, including cooperation, early admission of fault, and no evidence of consumer harm. The firm also agreed to pay £600 in costs to cover the costs of the SRA’s investigation.
What can law firms and regulated businesses learn?
This case underscores some key compliance takeaways:
- Risk assessments are non-negotiable. Especially in high-risk areas like property transactions, regulators expect firms to document and justify their due diligence decisions.
- Compliance isn’t a one-off task. AML obligations evolve, and firms must stay up to date with regulatory guidance—like the SRA’s latest AML updates issued as recently as October 2023.
- Governance matters. The SRA found Holden Smith lacked effective governance systems, a core requirement for managing risk in any regulated environment.
- Proactive action pays off. The penalty was reduced in recognition of the firm’s remedial actions and cooperation—showing that regulators value transparency and willingness to improve.
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