The regulator has also fined Metro Bank’s former chief executive Craig Donaldson and former chief financial officer David Arden £223,100 and £134,600, respectively, for being knowingly concerned in the breach.
As part of its quarterly financial results, Metro Bank included so-called Risk Weighted Assets (RWA) on which its regulatory capital requirements are based.
The lender was found to have given false information regarding the RWA figure in its third quarter trading update on 24 October 2018.
The FCA said Metro Bank was aware at the time that this figure was wrong and failed to qualify it or explain that it was subject to an ongoing review and would require a substantial correction. The bank also failed to seek legal advice over the figure. Therefore, the bank was not taking due care to not mislead investors.
Major fall is Metro’s share price
When the correct RWA figure was announced in January 2019, it contributed to a 39 per cent fall in Metro Bank’s share price. The FCA said it considers that Donaldson and Arden were aware of the breach in the listings rules.
Metro Bank has not referred the decision to the Upper Tribunal but Donaldson and Arden have and will each present their case.
It means decision notes for the pair are provisional and reflect the FCA’s belief as to what occurred. The Upper Tribunal will determine whether to uphold the FCA’s decisions.
The FCA considers that Mr Donaldson and Mr Arden were knowingly concerned in Metro Bank’s breach of the Listing Rules. They were aware that the RWA figure in the October Announcement was wrong and would require substantial correction. Despite this, they failed to consider whether the figure ought to be qualified or explained and failed to seek legal advice on this question, the regulator added.
Mark Steward, executive director of enforcement and market oversight, said: “Listed firms must ensure that the information they are disclosing to the market is right. This is what investors are entitled to receive.
“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.”
