Local law firm shuts down after being sanctioned for AML breaches

A Gibraltar law firm has been fined £50,000 for failing to comply with anti-money laundering obligations under the Proceeds of Crime Act.

Wilkinson Law Limited, trading as Strait Law, has been sanctioned by the Legal Services Regulatory Authority (LSRA), which identified six contraventions during an on-site inspection.

The firm's director, Richard Andrew Wilkinson, has been suspended from practising law for 12 months and banned from holding any managerial role for 18 months.

The Legal Services Regulatory Authority carried out an on-site inspection at the offices of Wilkinson Law - trading as Strait Law - between the 28th November and the 2nd December.

It found the firm had a low effectiveness at complying with its Proceeds of Crimes Act responsibilities, and was deemed to be high risk in the areas of Anti-Money Laundering, countering the financing of terrorism, counter-proliferation financing and sanctions obligations.

The regulator identified shortcomings including failures to report suspicious activity, inadequate sanctions checks, poor record-keeping, insufficient verification of clients' funds, and weaknesses in its risk assessment procedures.

Strait Law was also found to have provided legal services on non-Gibraltar matters, including unauthorised work for UK clients from Gibraltar.

The LSRA stressed their findings did not mean the firm has actually conducted or engaged in any of these activities.

Strait Law has been fined £50,000, is restricted to carrying out legal work in Gibraltar, and has been ordered to stop using its client accounts for non-Gibraltar matters. It must also refrain from taking on certain new financial services work until it satisfies the regulator that it has addressed its compliance failings.

The firm's director and money laundering reporting officer, Richard Wilkinson, has been suspended for 12 months, and is barred from carrying out any managerial function in the firm.

The regulator says it will be publishing extended guidelines specifically in relation to legal practices.

In response to a request by GBC for comment, the firm sent the following statement: 

Mr Wilkinson acknowledges the decision of the Legal Services Regulatory Authority and respects the role of the Authority as the regulator of the legal profession in Gibraltar.

Whilst Mr Wilkinson does not accept all of the findings and conclusions reached by the LSRA, he has taken the decision not to pursue a challenge to the decision. This decision has been influenced by his age, his health, and his wish to avoid lengthy and costly proceedings.

 After many years in practice, Mr Wilkinson has decided that it is in the best interests of all concerned to retire from the profession and to bring the affairs of the practice to an orderly conclusion.

 The directors of Wilkinson Law Limited t/a Strait Law have therefore resolved to cease trading and close the practice. The firm's immediate priority is to ensure that all client matters are dealt with appropriately, that client monies are returned to their rightful owners, and that the closure process is conducted in a professional and responsible manner.

GBC understands staff have been served redundancy notices.