The Financial Conduct Authority has won a High Court appeal in its bid to fine former Bradford & Bingley group finance director Christopher Willford £100,000 for failing to verify the bank’s results ahead of a rights issue.
The case centres around the handling of Bradford & Bingley’s proposed rights issue in May 2008.
In June 2008 the board was forced to issue an updated trading statement, which amounted to a profit warning, and despite the rights issue being restructured the capital raising was ultimately unsuccessful. B&B was nationalised in September 2008 with its savings business and branch network sold to Santander.
A decision notice was issued against Willford in October 2010 by the Regulatory Decisions Committee, part of the regulator’s independent appeals process.
The RDC said Willford failed to ensure the finance department checked B&B’s financial results in light of the rights issue and failed to realise there had been a material change in the bank’s trading position.
The decision notice also said Willford had failed to realise that bad mortgage debts had increased to a level that could seriously impact profits.
Willford challenged the decision notice via a judicial review, arguing the reasons given by the RDC for the £100,000 fine were inadequate.
He originally won that judicial review, but the FCA has now won an appeal to reinstate its decision notice.
Willford can now either choose to fight the decision through the Supreme Court or the Upper Tribunal, or accept the decision notice.