14 January 2014

Finance director fined for failing to adequately advise board

Harvey Knight
Partner | UK

The FCA has fined Christoper Willford, the former finance director (CF1) of Bradford & Bingley, £30,000 for failing to provide the board with up-to-date information about the bank’s financial position ahead of its 2008 rights issue in breach of Principle 6 of the FCA’s Statements of Principle for Approved Persons.

The FCA found that, between 16 May 2008 and 18 May 2008, Mr Willford failed to have proper regard to the available financial information and its relevance to the aborted rights issue, and advise the board of the bank appropriately. In particular, he did not adequately review the financial information he received on 16 May 2008 and as a result he failed to appreciate that the documents indicated a possible material change in the financial outlook of the bank.

The fine reiterates the importance for individuals holding senior positions in firms, or that are advising on boards, to ensure that they are properly advising the firm on the substance and significance of information held, as the FCA will hold them personally accountable for any failures to do so.

In deciding the amount of the fine, the FCA did take into account that the relevant events occurred during a time of wider financial crisis which created great pressure on Mr Willford and his finance function; the serious illness of the CEO at that time; other senior individuals in the finance function having access to the same information and coming to the same conclusion it did not warrant any further investigation; the failure to investigate did not result in a trading update amounting to a profits warning having to be issued nor the failure of the rights issue.

Category: Article