Law firm and director fined over inadequate due diligence checks
12 October 2021
Bring calm to the chaos and compliance to your communications. Integrated and automated email functionalities enable you to automate workflows to ensure communications comply with firm policies, client preferences, and ethical and regulatory guidelines.
Sanctions were imposed by the SRA following a regulatory settlement agreement that was approved by the Solicitors Disciplinary Tribunal. It was found at tribunal that due diligence checks had not been performed by Ogbonna on two property transactions made in August 2018 and January 2019.
Furthermore it was found that Ogbonna failed to identify that one of the clients was a politically exposed person under which anti-money laundering regulations would have required completion of further checks.
Ogbonna stated that during the course of the checks a “manual override” function was used to ensure that the checks appeared as compliant, rather than non-compliant. Similarly, checks relating to sources of funds were not properly completed despite Ogbonna indicating that they had been.
Ogbonna allowed a payment of £37,865 to be made from his firm’s client account after one of the transactions was aborted in September 2018, therefore providing a banking facility. Ogbonna argued that the client had been recommenced to him from a reliable agent but was not aware that the client could be a politically exposed person.
The tribunal also heard that Ogbonna, proposed a fee of £2,340 for each transaction. He was however supposed to verify the identities of clients and parties making payments into the firm’s client account, as well as the sources of funds received, which he failed to check adequately.
Ogbonna was fined £12,500 and will be subject to conditions preventing him from being a compliance officer for two years. The firm was fined £15,000. Both the firm and Ogbonna will pay joint costs of £10,000.
For more information on how Advantage365 can help your law firm, please call us on 0121 212 6580 or request a free call-back using our contact form https://www.advantage365.co.uk/contact to get free initial advice. You can also access a wealth of free business information for lawyers by visiting our digital Resource Centre https://www.advantageconsulting.co.uk/resources and view our free Business Factsheets https://www.advantageconsulting.co.uk/factsheets.
Alternatively, please subscribe to our services here https://www.advantage365.co.uk/subscribe-advantage365 or book an online consultation here https://www.advantage365.co.uk/book-online, or email us on email@example.com