The FCA has fined former Bradford & Bingley group finance director Christopher Willford £30,000 for failings ahead of a rights issue at the height of the financial crisis.
The regulator says Willford failed to provide the board with up-to-date information about B&B’s financial position.
The final penalty has been reduced from £100,000 to £30,000 following oral evidence given as part of the three-year legal battle between Willford and the regulator.
On 16 May 2008, three days ahead of a capital-raising rights issue, Willford received information that was out of kilter with previous forecasts and showed that B&B’s bad mortgage debts, arrears and repossessions had risen, while the difference between the interest rates B&B charged to, and received from, its customers had fallen.
It showed that money set aside against bad mortgage debts had reached £25.7m – 63 per cent of the £56.5m forecast for that year – and that arrears and repossessions had risen from 2 per cent in March to 2.16 per cent in May.
The FCA says this information should have been raised immediately with B&B’s board and investigated to ensure the information provided to shareholders about the rights issue was correct.
FCA director of financial crime and enforcement Tracey McDermott says: “Willford failed to identify and investigate potentially material risks, or alert the board, at a crucial time for the firm.
“Senior managers should expect the FCA to take action if they fail to show due skill, care and diligence.”
The FCA did not find that Willford’s conduct caused the failure of the rights issue or B&B’s subsequent nationalisation.
It says the size of the fine reflects the length and timing of the misconduct, which took place over three days during the height of the financial crisis.
Willford was B&B’s finance director between October 2005 and June 2009.
The case has been subject to legal wrangling since the FSA issued a decision notice in October 2010. Willford had the decision judicially reviewed and won his case in May 2012. The FSA then went to the Court of Appeal, which overturned the judicial review in June 2013.
Jacksons Wealth Management managing director Pete Matthew says: “This individual failed to do his duty and it sounds like he got off fairly lightly.”