The corporate regulator has cleared embattled law firm Slater and Gordon of falsifying its financial records and accounts, saying there was no indication of any breach of law and no penalties will be enforced.

ASIC said its investigation was focused on the accuracy of financial records and accounts for the period between December 2014 and September 2015 and whether records and accounts were deliberately falsified or manipulated, and whether any of its employees committed any offences.

"ASIC has stated in its correspondence that the information and evidence available to it following its investigation does not indicate there was a breach of law," Slater and Gordon said in a statement to the ASX.

Meanwhile, Slater and Gordon is facing a class action lawsuit from Maurice Blackburn, claiming the company did not inform investors about its true financial position early enough.

Slater and Gordon shareholders are losing hope of recovering money from their investments, with many small investors facing losses in the hundreds of thousands of dollars.

Shares in the company hit a high of almost $8 in 2015, but has since crashed to 11 cents, with its troubles beginning after its disastrous $1.3 billion acquisition of the professional services arm of UK firm Quindell.