SRA fines Leadenhall Law Group £16,100 for failing to apply enhanced Money Laundering Regulations checks on politically exposed person client
The Solicitors Regulation Authority (SRA) has fined Leadenhall Law Group, a Norwich-based firm, £16,100 after finding it lacked adequate systems to identify a politically exposed person (PEP) client and comply with enhanced due diligence requirements imposed by the Money Laundering Regulations 2017. The firm acted for a non-domestic PEP and their associated companies across 14 residential property purchases between March 2017 and January 2020. The Money Laundering Regulations 2017 require firms acting for a PEP to obtain senior management approval before establishing or continuing the relationship, to take adequate measures to identify the source of the client's wealth and funds, and to conduct enhanced ongoing monitoring. The SRA established that Leadenhall did not have the systems in place to adequately identify the client as a PEP or establish their source of funds and wealth, and admitted multiple rule breaches. The SRA's fining guidance produced a basic penalty of £17,880 based on the firm's turnover. That was reduced by 10% to £16,092 in recognition of the firm's co-operation with the investigation and confirmation that it has since brought itself into compliance. The published notice emphasises that PEPs are considered high-risk clients because their positions of power and influence make it easier to obtain funds through corruption.
Why this matters
This enforcement action is a reminder that anti-money laundering (AML) compliance obligations under the Money Laundering Regulations 2017 apply to property transactions as much as to financial services, and that deficiencies in client-identification systems remain an active SRA enforcement priority years after the relevant rules came into force. The reduction granted for co-operation signals that the SRA is willing to moderate penalties where firms demonstrate genuine remediation, but the publication of the notice itself carries reputational consequences. For a sector where conveyancing practices handle large volumes of property transactions, the case reinforces that PEP screening needs to be embedded in onboarding processes rather than left to individual fee-earner judgment.
On the Ground
The enforcement touches AML compliance, professional regulation, and property law practice areas. Law firms advising on high-value residential property transactions need robust client due diligence and PEP-screening procedures as a matter of regulatory necessity. In-house compliance teams and general counsel at mid-sized firms will use this decision to benchmark their own AML frameworks. A trainee involved in this type of regulatory compliance work would assist with drafting regulatory notification letters to the SRA, maintaining remediation trackers, reviewing and updating client due diligence procedures, and helping to prepare compliance gap analysis memos comparing the firm's current systems against the requirements of the Money Laundering Regulations 2017.
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