Yahoo Finance Metro Bank fined £10m for publishing incorrect information
Metro Bank has been fined £10m by the City watchdog after the lender failed to disclose an accounting blunder to investors.
The Financial Conduct Authority (FCA) said Metro had breached its UK listing rules by publishing incorrect information to investors.
The regulator also fined Craig Donaldson, its former chief executive, and David Arden, its former finance chief, £223,000 and £134,000, respectively.
Metro said in January 2019 that it was not holding enough capital and had to increase its risk-weighted assets by £900m, wiping hundreds of millions of pounds off its share value in a day and forcing its top bosses to quit.
It then emerged that the bank had wrongly told the market that it found the error itself when it was the Bank of England that found a flaw in its accounts.
Mark Steward, head of enforcement at the FCA, 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.”
Metro Bank told investors last week it had increased its provision for the fine from £5.3 to £10m in anticipation of the FCA penalty, adding it was within the range of up to £13m that it had previously set out.
Metro was fined £5.4m by the Bank of England's Prudential Regulation Authority last year for failings in its regulatory reporting related to the error.
The bank is not challenging the FCA’s decision, while Mr Donaldson and Mr Arden have appealed their cases to a tribunal.
A spokesman for Mr Donaldson and Mr Arden said: "While we’re disappointed by today’s ruling from the FCA’s Regulatory Decisions Committee we welcome the fact there is no finding of any dishonesty or criticism of our integrity.
“We operated in full transparency with the Board and the PRA, and with the benefit of legal advice. We are appealing the decision, and until that process is complete, we will not be making further comment."
Metro said the conclusion of the FCA and PRA inquiries “represents an important milestone” for the bank, adding: “Since 2018, 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.”
