The former group finance director of Bradford & Bingley has been fined £30,000 by the Financial Conduct Authority (FCA) for failures ahead of the 2008 rights issue.
Christopher Willford was penalised for failing to provide the board with up-to-date information about B&B’s financial position, including profits, mortgage arrears and repossessions, ahead of its 2008 rights issue.
He received information on 16 May 2008 that suggested B&B’s financial outlook might be weaker than expected.
As B&B was preparing to raise capital through a rights issue, this should have immediately been raised with B&B’s board and investigated to ensure the information provided to shareholders was correct.
Tracey McDermott, the FCA’s director of financial crime and enforcement, said: “Willford failed to identify and investigate potentially material risks, or alert the board, at a crucial time for the firm.
"His conduct fell short of the FCA’s standards, senior managers should expect the FCA to take action if they fail to show due skill, care and diligence.”
The information Willford received was out of kilter with previous forecasts, and showed that bad mortgage debts, arrears and repossessions had all risen, whilst the difference between the interest rates B&B charged to, and received from, its customers had fallen.
This was particularly significant as it suggested B&B could have fallen short of forecast profit for the year.
As finance director, Willford was responsible for investigating these issues and ensuring material provided to shareholders on B&B’s financial position was correct.
The FCA did not find that Willford’s conduct caused the failure of the rights issue, or B&B’s subsequent nationalisation.
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.
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