[2025] UKUT 00185 (TCC)

Metro Bank (“the Bank”) began operations in 2010 with Mr Craig Donaldson as its Chief Executive Officer (“CEO”). Mr David Arden joined in March 2018 as Chief Financial Officer (“CFO”). On 24 October 2018, the Bank published its third quarter trading update (“the Q3 Update”), which included the statements that “capital ratios remain robust”; that risk weighted assets (“RWAs”) were £7,398m and that total capital as a percentage of risk-weighted assets was 19.1%. Those figures were not correct. When amended numbers were published in January 2019, there was a 39% drop in the Bank’s share price.

The Financial Conduct Authority (“the Authority”) decided that the Bank had breached Listing Rule (“LR”) 1.3.3R, because it had failed to take reasonable care to ensure that the Q3 Update was not false or misleading and did not omit anything likely to affect the import of the information contained within it. On 8 December 2022, the Authority issued a Final Notice imposing a penalty of £10,002,300 on the Bank for that breach of LR 1.3.3R. The Bank did not contest the Notice.

The Authority also decided that Mr Donaldson and Mr Arden had been “knowingly concerned” in the Bank’s breach, and under s 91 of the Financial Services and Markets Act 2000 (“FSMA”) imposed a penalty of £223,100 on Mr Donaldson and a penalty of £134,600 on Mr Arden. The penalties were imposed on the basis that Mr Donaldson and Mr Arden had acted negligently; it was no part of the Authority’s case that either lacked integrity or had been reckless.

The Authority set out the Decisions in decision notices (“the Decision Notices”) issued on 10 November 2022. Mr Donaldson and Mr Arden referred the Decision Notices to the Tribunal (“the References”).

The first issue was thus whether the Bank had breached LR 1.3.3R; if the answer to that question was “yes”, the second issue was whether the Applicants were knowingly concerned in the breach, and if so, the third issue was whether to uphold the penalties.

We summarise the positions taken by both parties at §§270ff. Most of their submissions concerned what happened at the time, and we therefore made detailed findings of fact. The parties also disagreed about the meaning of “knowingly concerned”, see §§482ff.

For the reasons given in the main body of this judgment, we decided that:

We had the benefit of excellent written and oral submissions from Mr Ben Jaffey KC and Mr Simon Pritchard for the Applicants, and from Mr Paul Stanley KC and Mr Ajay Ratan for the Authority. When we refer to those written submissions in this judgment, for brevity we have referred to them as having been made by Mr Jaffey or Mr Stanley, but we do not underestimate the significant contributions made by Mr Pritchard and Mr Ratan. The fact that we have not referred to all the submissions a party has made does not mean that they have not been carefully considered and appreciated.

All legislation and case law in this judgment is cited only so far as relevant to the issues being considered.