Metro Bank and two of its former senior managers were hit with penalties by the U.K.'s financial watchdog for knowingly giving investors misinformation linked to the lender's capital adequacy.
Metro Bank was fined £10 million ($12.2 million) after it published incorrect information on its risk-weighted assets, an important measure for regulatory capital requirements, in its third quarter trading update on Oct. 24 2018, the Financial Conduct Authority said on Monday. The regulator said the bank knew that the figure was wrong and failed to qualify or explain it.
Craig Donaldson, former chief executive officer of the bank, and ex-chief financial officer David Arden were provisionally fined £223,100 and £134,600, respectively, for being "knowingly concerned" of the breach, the watchdog said. The pair have referred their case to a tribunal to decide whether to uphold the fines, but the bank has not.
"The UK's Listing Rules impose high standards on issuers and their officers which Metro Bank, Mr Donaldson and Mr Arden failed to meet in this case," Mark Steward, executive director of enforcement and market oversight, said in the
Metro Bank said in a statement it cooperated fully with the FCA investigation and won't dispute the outcome. The fine is within the range outlined at the company's full-year 2021 results and has been fully provided for, the bank said.
"Metro Bank has completed extensive remediation activity and made substantial investment to improve its disclosure procedures as well as enhancing its regulatory reporting processes, risk management framework and governance and compliance culture more broadly," it said.
Donaldson and Arden said in a statement that they are appealing the decision and "welcome the fact there is no finding of any dishonesty or criticism of our integrity."
