Mishcon de Reya fined £232,500 for AML Failures

Richard Marley
January 06, 2022
3 minutes read
2466

London’s leading firm, Mishcon De Reya has been fined EUR 232,500 over failing Anti-Money Laundering (AML) regulations.

The company is also paying an additional EUR 50,000 to the Solicitors Regulation Authority (SRA) as a regulatory settlement so that this matter will not go to a disciplinary tribunal. This incident comes in the wake of Mishcon being fined EUR 25,000 by the Solicitors Disciplinary Tribunal for allowing the customer account to be used as a banking facility. However, the full ruling has not yet been published.

When Mishcon first revealed its intention the last April, stated that it “continues to engage with the Solicitors Regulation Authority on historic matters which it reported to the SRA”.

According to the SRA regulatory investigation between September 2015 and April 2017, Mishcon assisted two customers and corporate vehicles connected with them. Asset planning for one individual and the initial stages of the proposed acquisition of two separate entities. While the company stated that customer due diligence procedures were conducted for two clients, however, report copies were not retained. While some CDD documents were obtained for the corporate vehicles. Mishcon also admitted that both entities held a high risk of money laundering and terrorist financing because they were involved in business operations in high-risk jurisdictions, but it did not implement enhanced due diligence and ongoing monitoring required as a regulatory obligation.

Additionally, the capital belonging to one business vehicle was transferred to the client ledger from another corporate vehicle and used to discharge the company’s fees on the matter associated with the latter entity. An external investigation conducted by the company found that the unnamed former partner had not obtained the necessary AML training as per laws.

The SRA explained: “The firm secured CDD in relation to the ultimate beneficial owner but, because it opened each matter file in the name of a different entity in the corporate structure, the firm did not secure full CDD for each special purpose vehicle before each relevant transaction took place. The firm also did not retain copies of some of the CDD information obtained in relation to the ultimate beneficial owner, and in relation to another individual who instructed the firm on a fourth, related, matter.”

The firm also prepared a risk assessment by an external provider and was sent to SRA in May 2019.

In mitigation, Mishcon said it had shown “genuine insight into its management of risk and actions during the relevant periods” and has since amended its policies and procedures, “including introducing and investing in new, more sophisticated IT systems which involve increasingly centralized record-keeping and are, in part, specifically designed to prevent future breaches of the type addressed by this agreement”.

Mishcon had also “assisted the SRA throughout the investigation, admitted breaches, made changes to systems, policies, and procedures as a result, and ensured training to all relevant employees is regularly provided”.

A Mishcon de Reya spokeswoman said: “We are pleased to have come to a settlement with the SRA relating to two separate and historic investigations in relation to which we have made appropriate admissions. Mitigating factors such as our cooperation with the SRA throughout the investigations and the corrective action we have taken since to prevent a recurrence have been recognized by the SRA in reaching this outcome.”

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ASIC Expands its Team to Enhance Cryptocurrency Regulations
Australia’s financial regulator has enhanced the size of its crypto team. The crypto regulatory measures include their application for financial services licenses and show that specific crypto platforms have particular liquidity in reserve.

After shifting popular blockchain from a proof-of-work (PoW) to a proof-of-stake (PoS) system, ASIC, Australia’s financial regulator, has increased the size of its crypto team.

U.S. Security and Exchange Commission Chairman Gary Gensler stated that PoS-based tokens might be classified as securities.

The decision of ASIC to keep PoS tokens for example Ethereum, Cardano and Solana under its remit will further clarify the situation and enable crypto regulations to be more effective. To cope with the latest regulatory reforms, the crypto exchange must either delist the tokens or start complying with robust crypto laws.

Such moves may force a few crypto firms to manage their operating models. Even the largest stablecoin of the crypto market, Tether, has been caught in a controversy created over the failure of holding enough dollar reserves to back the stablecoin.

The crypto regulatory measures include their application for financial services licenses and show that these platforms have particular liquidity in reserve.

The final decision by the regulator has not been issued yet. Greg Yanco, the executive director for marketers, said that ASIC won’t be a “cheerleader for crypto assets.”

SEC Newgate carried out research the last November. It showed that 44% of Australian retail investors reported holding crypto. Out of these investors, only 20% viewed crypto as high-risk.

The chairperson of ASIC responded and said that the regulators were “concerned that there are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulating crypto-assets to better protect investors.”

According to Yanco, until the last year, cryptocurrency was not such a high priority. Still, due to the decline of cryptocurrency in the previous few years and investors wiped out around the globe, ASIC expanded its team. It made crypto one of its “core strategic projects.”

Suggested Read: Regulatory Authorities to File a New Bill to Secure the Citizens from Cyber Criminal Activities

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Forensic document verification involves incorporation of scientific rules in examining the authenticity of records. There are experts in this field who carry out all the operations using specialized methods. Nowadays, the use of forensics is rising, especially in courts where no document is accepted without authentication. By using several techniques like handwriting identification, ultraviolet light sources, microscopes, photography, and infrared imaging in the laboratories, a document is verified. All the major jurisdictions have formed dedicated institutions which overlook the process of document verification. The American Board of Forensic Document Examiners (ABFDE) is the primary authoritative body responsible for monitoring forensic operations in the US, and any person carrying out these activities anywhere in the country must be a member of this board.

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Canada

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Want to know more about forensic forgery analysis of documents for digital businesses?

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Mishcon de Reya fined £232,500 for AML Failures

Forensic Document Verification – A New Standard

How Forensic Document Verification is Carried Out?

High-Profile Crime Cases of Document Fraud

Gang Arrested for Printing Fake Documents in Greece

Criminal Network Busted for Distributing Fake Documents

Regulatory Authorities Monitoring Document Fraud

Canada

Australia

Document Forgery Forensic Authentication – Ensuring KYC Compliance

What Shufti Pro Offers?

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Let’s prove your customer’s

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