Tribunal finds former CEO and CFO knowingly involved in publishing inaccurate financial data
The Upper Tribunal has upheld the Financial Conduct Authority's (FCA) ruling that former Metro Bank chief executive Craig Donaldson and former chief financial officer David Arden were knowingly involved in breaching stock exchange listing rules.
The case relates to Metro Bank’s financial disclosures to the market. As a listed entity, the lender regularly shared updates on its financial position, including risk weighted assets (RWAs), which are used to determine capital adequacy requirements.
In October 2018, Metro Bank issued financial results that included an unqualified figure for its RWAs and corresponding capital ratios. However, it was later revealed that the figures were inaccurate due to a significant miscalculation — an error that was known internally but not disclosed to investors at the time.
Revised figures published in January 2019 reflected the correction, triggering a 39% fall in the bank’s share price.
The FCA fined Metro Bank £10 million in December 2022 for breaching its obligations under the listing rules. According to the regulator, Donaldson and Arden were aware of the issue prior to the October 2018 announcement and were part of the decision to release the incorrect data to the market.
“The UK listing regime relies on disclosure and transparency to allow investors to make fully informed decisions,” the FCA stated. “It is of fundamental importance that market disclosures by listed companies are not false, misleading or deceptive and do not omit anything likely to affect the import of the information that is disclosed.
“This ensures that they can be relied on by investors in making investment decisions to hold, buy or sell an investment. Disclosure and transparency serve to advance the authority’s strategic objective of ensuring the relevant markets function well and its operational objective of protecting and enhancing the integrity of the UK financial system.”
“Arden and Donaldson allowed information they knew to be wrong to be published,” added Steve Smart, executive director of enforcement and market oversight at the Financial Conduct Authority.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
