MLRO: applicable standards
The Law Society of England and Wales has brought proceedings against a money laundering reporting officer in a law firm.
In the first disciplinary hearing relating to the competence of a money laundering reporting officer the Solicitors' Disciplinary Tribunal (SDT) of the Law Society of England and Wales has found a Solicitor guilty of "unbefitting conduct." She has been suspended from practice for an indefinite period.
A money laundering reporting officer is the colloquial name for the person who is responsible for receiving internal reports and considering them where a member of staff within the firm suspects money laundering. The term is in widespread use in the UK and is now used by the Financial Services Authority in its Rules.
The Solicitor was a partner in a small law firm. In addition to her work, she took on the role of Money Laundering Reporting Officer. The role is arduous and often provides conflict within the business (although there is no suggestion that there was, in this case, such conflict within her firm).
Without any dishonesty, she withdrew money from the clients' (trust) account for a purpose that was not authorised under the Law Society Rules.
The SDT drew specific attention to the fact that in taking on the role of MLRO, the solicitor had taken on a function that was outside her capabilities and professional expertise.
The question arises, then, how any small practice which is under a duty to have a MLRO can have that function integrated within the senior management of the firm where the pressures of being in practice are great.
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