Asons Solicitors in Churchgate, Bolton, was closed on Thursday by the Solicitors' Regulation Authority (SRA).
It suspended the licence of the firm's former chief executive, Kamran Akram, and took possession of all documents and money held by the firm.
The regulator said the "grounds of intervention" were breaches of its principles and code of conduct.
"No further details can be disclosed" at this stage, it added.
Further information will only be released "if disciplinary proceedings become necessary", which could involve a sanction - a fine by the Solicitors' Disciplinary Tribunal, the SRA said.
In February, Asons agreed to repay about Â£70,000 to AXA Insurance after admitting "to falsely and systematically inflating its legal costs", a statement from AXA said.
A spokesperson for the firm, which denied acting fraudulently, told the Law Society Gazette at the time: "Following a complaint by AXA, an internal investigation was immediately undertaken.
"We reported the matter to our regulator and any overpayments were returned. New procedures were instigated and we are satisfied that there has been no recurrence of the historical issues raised by AXA."
A law firm in Greater Manchester has been shut down for allegedly breaching the solicitors' regulator's code.