You are a trainee solicitor with a medium size law firm, Moran, Talbot & Fox LLP, based in Leeds.

Your mentor, Megan Talbot, who is also one of the partners, has just had a meeting with one of

the firm's associates regarding some potential irregularities that have been identified in client files

and use of the firm's client account. In the light of the fact that you have a more up-to-date

understanding of the SRA's professional requirements, she asks you to provide her with a

confidential report highlighting the following points with regards to Henry:

Any possible statutory and professional regulatory provision(s) applicable to the situation

The possible classification of Henry's actions under both statutory and regulatory provisions

The processes and procedures that Henry may be subject to in relation to the classification

of his actions

Megan emphasises the fact that this is to be kept strictly confidential and that you must only

communicate with her on this matter.

The meeting notes with which she provides you contain the following information:

The associate's name is Henry Lynch. He qualified four (4) years ago and has been with the firm

since leaving law school. To date there have been no complaints or concerns about his work.

Since qualifying, Henry has built up a client portfolio which includes a long standing client

called Carlos Begby.

Recently, Henry has assisted Carlos in his proposed purchase of three (3) storage units next to

the canal in Leeds. They are high value purchases because of their prime location and Carlos is

funding these purchases with assistance from his business partners Mr Khalli who lives in

London. All three (3) purchases are cash buys and require no mortgage or external loans.

Four (4) months ago, Carlos introduced Henry to Mr Khalli at a meeting in London and referred to

him as his business partner. Carlos mentioned that Mr Khalli has recently expatriated from

Colombia and is keen to expand his business interests in the UK. As such, he wishes to

purchase the 'Atomic Casino' which is based in central London and asks whether Henry would be

able to assist him with this.

Due to his recent move to the UK, Mr Khalli didn't present any documents or passport but

promised to do so as soon as his cases arrived from the delivery company. In the meantime,

Carlos "vouched 100%" for his colleague and assured Henry that he was a "good guy". Carlos is

a prized client and Henry didn't want to lose him. As such, he agrees to start work on Mr Khalli's

case on the understanding that Mr Khalli will provide him with this documentation.

One (1) month later Henry permits a single agreed deposit of 300,000 from a money

transfer account to be made into the firm's client account concerning Mr Khalli's purchase of

Atomic Casino. A few weeks later Carlos called Henry to explain that Mr Khalli has been

experiencing problems with his bank account as a result of a mix up with his documents during

his immigration to the UK. Carlos asks Henry whether Mr Khalli could use the firm's client account

for a brief period of time in order to support Carlos to complete the purchases of the three (3)

storage units in Leeds.

Carlos is a very high value client and, with the added prospect of continuing high earning

transactions looming, Henry allows this to happen. Henry did not consider it necessary to discuss

the matter with anyone else in the firm. During the next couple of days, the Moran, Talbot & Fox

LLP client account receives 50 deposits ranging from 10,000 - 100,000 for both the personal

and business expenses of Carlos.

A routine client and file review by Moran, Talbot & Fox LLP reveal all of these financial

transactions. No shortfalls in the client account are discovered. A client file named

Carlos Begby contains three (3) years of financial statements all from different banks. Present in

the file is a photocopy of Carlos's wife's birth certificate and copy of a marriage certificate in the

name of Calvados Begby. Numerous other photocopies of business documents are present and a

photo membership card from an English golf club in the name of Carlos Begby. Nothing else

relating to Carlos Begby is held on file.

The client file marked 'Mr Khalli' contains a handwritten note of a mobile telephone number and a

money transfer reference number. There is a hand written note from Henry as a reminder to

chase Mr Khalli for a copy of his passport and other documents.

Following these discoveries, Moran, Talbot & Fox LLP opened an internal review. This meeting

between Megan Talbot and Henry Lynch is the first meeting. Megan is concerned about what has

been discovered and wants you to prepare the memorandum for her highlighting the points mentioned above.

Amongst other things, you may wish to Identify:

What information and documentation Henry Lynch should have requested from his clients

Whether he breached any of his duties as a solicitor

Whether he has breached any other statutory and professional regulatory provisions

applicable to the situation such as the Money Laundering, Terrorist Financing and Transfer

of Funds (Information on the Payer) Regulations 2017.

The classification of his actions under statutory and regulatory provisions together with the

potential penalties

The processes and procedures that Henry may be subject to in relation to the classification

of his actions

You may also wish to consider whether he should have spoken with the firm's COLP (Compliance

Officer for Legal Practice) and COFA (Compliance Officer for Finance & Administration) at any

stage.

Finally, whilst there is potential scope to discuss the SRA's Code of Conduct for Firms, and the

potential liability of Moran, Talbot & Fox LLP in this scenario, your memorandum should focus

solely on Henry Lynch.