Release Date: 11th December 2013
To access the original FCA document, click here.
Summary
Mr. Christopher Willford, the former Group Finance Director at Bradford & Bingley plc (BBG), was fined £30,000 by the Financial Conduct Authority (FCA) for breaches of Principle 6 of the FCA’s Statements of Principle for Approved Persons (APER). The FCA imposed this financial penalty due to Mr. Willford’s failure to properly manage financial information during a critical period leading up to and during a rights issue in May 2008.
During the specified period between 16 May 2008 and 19 May 2008, Mr. Willford neglected to thoroughly review vital financial data that indicated significant changes in the bank’s financial outlook. This negligence resulted in insufficient information being presented to the Board of BBG, affecting the board’s ability to make informed decisions regarding the rights issue. Specifically, Mr. Willford failed to ensure that the board was adequately informed about a deteriorating financial outlook before authorising a circular on the rights issue. His actions lacked the due skill, care, and diligence required by his role, particularly during a time when accurate financial reporting was crucial due to volatile market conditions.
This case underscores several key lessons for other firms and finance professionals:
- Responsibility and Oversight: Senior finance officials must rigorously oversee all financial reporting and ensure they understand and communicate the significance of the financial data, especially during periods of financial instability or significant corporate actions like rights issues.
- Board Communication: It is critical to ensure that all pertinent financial information is escalated to and considered by the board, enabling them to fulfil their governance roles effectively.
- Due Diligence and Verification: Before releasing any financial statements or related communications, particularly during sensitive operations like rights issues, finance directors must verify that all statements and disclosures are accurate and complete.
- Handling of Critical Information: Financial directors must ensure that any material changes in financial outlook are promptly and clearly communicated to the board, avoiding delays in important decision-making processes.
The FCA’s decision to fine Mr. Willford serves as a reminder of the importance of compliance with regulatory standards and the potential consequences of failing to meet these obligations. The case also highlights the broader regulatory focus on ensuring that key financial officers within banks and other financial institutions carry out their duties with the utmost integrity and due diligence to uphold the stability of the UK financial system.
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