FINRA Hits SageTrader with New $100k Fine for AML Failure

FCA Fines Metro Bank £10M for Compliance Breach

by Arnab Shome
  • Two former top executives were penalized for knowing about the incorrect data publication.
  • Both of the former executives appealed against the FCA's decision.
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The Financial Conduct Authority (FCA ) announced its action against another bank on Monday: the financial market regulator fined London-headquartered Metro Bank more than £10 million for publishing incorrect information to investors.

The UK regulator further took action against Metro Bank's former Chief Executive, Craig Donaldson and former Chief Financial Officer, David Arden for "knowingly concerned" about the reach of the listing rules. Donaldson has been fined £223,100, while Arden has to pay £134,600.

Metro Bank has to report its prudential position on a quarterly basis, including the Risk Weighted Assets (RWA) on which its regulatory capital requirements are based. However, the bank published incorrect RWA figures in the quarterly update posted on 24 October 2018.

According to the FCA, the bank was aware of the incorrect figure but did not explain it in the quarterly update. It did not even seek legal advice on "whether the incorrect RWA figure ought to be qualified or explained in the October Announcement." Thus the bank failed to ensure that the quarterly announcement was "not false and misleading and did not omit relevant information."

The bank announced the correct RWA figure in January 2019, resulting in a 39 percent slide in the Metro Bank's share price. However, the regulatory penalty did not hurt the investors' sentiment as the Metro Bank share price has gained, as of press time, since the market's opening on Monday.

Check out the recent London Summit session on the upcoming financial services industry regulations.

Individual Appeals

Donaldson and Arden were penalized as they were aware of the incorrect RWA figure but did not take any action. Though Metro Bank has accepted the FCA's decision, the two former executives appealed against the regulatory decision in the Upper Tribunal.

"Listed firms must ensure that the information they are disclosing to the market is right. This is what investors are entitled to receive," said Mark Steward, FCA's Executive Director of Enforcement and Market Oversight. "The UK's Listing Rules impose high standards on issuers and their officers, which Metro Bank, Mr Donaldson and Mr Arden failed to meet in this case."

On top of that, the FCA heavily penalized financial services giants for their lapses in anti-money laundering (AML ) compliances. It recently slapped a £107.7 million fine on Santander UK for AML compliance breaches. Other significant fines were against Standard Chartered Bank for £102.2 million, HSBC Bank plc for £63.9 million and NatWest for £264.8 million.

The Financial Conduct Authority (FCA ) announced its action against another bank on Monday: the financial market regulator fined London-headquartered Metro Bank more than £10 million for publishing incorrect information to investors.

The UK regulator further took action against Metro Bank's former Chief Executive, Craig Donaldson and former Chief Financial Officer, David Arden for "knowingly concerned" about the reach of the listing rules. Donaldson has been fined £223,100, while Arden has to pay £134,600.

Metro Bank has to report its prudential position on a quarterly basis, including the Risk Weighted Assets (RWA) on which its regulatory capital requirements are based. However, the bank published incorrect RWA figures in the quarterly update posted on 24 October 2018.

According to the FCA, the bank was aware of the incorrect figure but did not explain it in the quarterly update. It did not even seek legal advice on "whether the incorrect RWA figure ought to be qualified or explained in the October Announcement." Thus the bank failed to ensure that the quarterly announcement was "not false and misleading and did not omit relevant information."

The bank announced the correct RWA figure in January 2019, resulting in a 39 percent slide in the Metro Bank's share price. However, the regulatory penalty did not hurt the investors' sentiment as the Metro Bank share price has gained, as of press time, since the market's opening on Monday.

Check out the recent London Summit session on the upcoming financial services industry regulations.

Individual Appeals

Donaldson and Arden were penalized as they were aware of the incorrect RWA figure but did not take any action. Though Metro Bank has accepted the FCA's decision, the two former executives appealed against the regulatory decision in the Upper Tribunal.

"Listed firms must ensure that the information they are disclosing to the market is right. This is what investors are entitled to receive," said Mark Steward, FCA's Executive Director of Enforcement and Market Oversight. "The UK's Listing Rules impose high standards on issuers and their officers, which Metro Bank, Mr Donaldson and Mr Arden failed to meet in this case."

On top of that, the FCA heavily penalized financial services giants for their lapses in anti-money laundering (AML ) compliances. It recently slapped a £107.7 million fine on Santander UK for AML compliance breaches. Other significant fines were against Standard Chartered Bank for £102.2 million, HSBC Bank plc for £63.9 million and NatWest for £264.8 million.

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