CEO and CFO of listed company fined by FCA for inaccuracies in market update: Lessons for PLC directors

The former CEO and former CFO of Metro Bank have been held to be personally liable for inaccurate information included in one of the company's RNS announcements. The decision provides a reminder of the high standards expected of directors of listed companies in relation to market disclosures.

Case: Donaldson & Arden v Financial Conduct Authority (FCA) ([2025] UKUT 00185 (TCC))

Background

In October 2018, Metro Bank plc (Metro Bank) published its third quarter trading update which included details of the bank's risk-weighted assets (RWA). At the time, Metro Bank was in ongoing discussions with its regulator, the Prudential Regulation Authority (PRA), about how to correctly report the bank's RWA position. It had been acknowledged by Metro Bank, both internally and in correspondence with the PRA, that the RWA figures used in its regulatory reporting to the PRA were incorrect. However, as work to determine the actual position had not yet been completed, inaccurate RWA figures from Metro Bank's regulatory filings were included in the bank's third quarter trading update. When Metro Bank subsequently published the corrected RWA figures for the bank in January 2019, its share price dropped by 39%.

A subsequent FCA investigation determined that Metro Bank had breached Listing Rule 1.3.3R which requires listed companies to take reasonable care to ensure that information notified to the market is not misleading, false, or deceptive, and does not omit anything likely to affect its import. For this breach of the Listing Rules, the FCA imposed a penalty of £10 million on the bank, which was not contested.

The FCA also imposed individual penalties on Craig Donaldson (former CEO of the bank) and David Arden (former CFO of the bank) on the basis that they were "knowingly concerned" in the breach of the Listing Rules. Both individuals referred the FCA's decision to the Upper Tribunal (Tax and Chancery Chamber) (the Tribunal).

In June 2025, the Tribunal delivered its judgment upholding fines of £167,325 on Donaldson and £100,950 on Arden.

Key issues and Tribunal findings

The following two issues were considered by the Tribunal:

1. Metro Bank's breach of the Listing Rules

Listing Rule 1.3.3R requires an issuer to take reasonable care to ensure that any information it notifies to a Regulatory Information Service is not misleading, false or deceptive and does not omit anything likely to affect the import of the information. In essence, this rule requires listed companies to ensure the accuracy and completeness of their market disclosures. At the time of the trading update, the CEO and CFO were found to have provided misleading figures to the board of Metro Bank and its audit committee which were not yet final, as the RWA issue was still being reviewed by external consultants.

In publishing an incorrect figure in respect of the RWAs, the bank had published figures in its trading update which were materially incorrect due to misapplication of regulatory risk-weighting rules. The Tribunal distinguished between situations where disclosure may be delayed (eg ongoing negotiations) and situations where a company publishes information it knows to be inaccurate. The Tribunal found that the CEO and CFO were aware of the error and its likely material impact at the time the trading update was published.

2. Director's personal liability for being knowingly concerned with the Listing Rules breach

Section 91 of the Financial Services and Markets Act 2000 permits the FCA to impose financial penalties on individuals who are “knowingly concerned” in a breach of the Listing Rules by an issuer. It sets out the FCA’s authority to take disciplinary action, including the process for issuing penalty notices and the rights of affected parties to refer the matter to the Tribunal for review.

The Tribunal relied on the FCA’s approach and case law (including FCA v Foster (2023)) which emphasised that “knowingly concerned” does not mean the individual must have intended to breach the rules or acted recklessly. It is enough that the individuals were aware of the facts that constituted the breach and participated in the relevant conduct.

The CEO and CFO submitted that their external legal counsel had provided advice to the effect that the RWA issue did not need to be reported to the market on the basis that it was not specific or material. The Tribunal found this advice was limited only to the Market Abuse Regulations and was based on incomplete and partially incorrect instructions provided by the bank: the bank had not sought or received specific advice from its external legal counsel on whether the bank could publish the RWA figure which it knew to be incorrect. As such, the individuals could not use external legal advice as a defence or a shield.

Implications for listed companies and their directors

The Tribunal’s decision in Donaldson & Arden v FCA highlights the importance of accurate reporting, transparency with legal advisers, and the need for effective governance and control frameworks.

In particular, the Tribunal's findings demonstrate that directors of listed companies can be subject to significant personal liability in relation to information reported to the market. This case serves as a cautionary reminder that no personal wrongdoing is required: awareness of the facts constituting a breach is enough, regardless of whether a director knows those facts constitute a breach.

The Tribunal closely examined Metro Bank’s governance processes, finding that committees and the board were given partial or misleading information. Listed companies must ensure that internal controls and governance frameworks are robust, and that all relevant facts are accurately presented to decision-makers.

In instances of doubt as to the accuracy of information, the Tribunal made it clear that "[i]f, for any reason, including internal control or data failings, [a listed company] is unable to report accurate figures… it has to “come clean about that”. It does not have the choice to report a figure that is known to be inaccurate or not believed to be reliable, without qualification. It is irrelevant that qualification may be embarrassing or commercially inconvenient."

Directors should ensure that, where external legal advice is sought, all material facts are provided and that the instructions and scope of the work are clear as to the intended use of any advice received. Seeking external legal advice does not provide a shield if the advice is based on incomplete or incorrect instructions, or if it does not address the specific issue at hand.