[2025] UKUT 00185 (TCC)

For the reasons already set out above, see §§568-571 and §591, the Authority’s position was that the seriousness was at level 3. The Applicants submitted that the seriousness did not reach that level, for the following reasons, all of which we have already considered and rejected:

Mr Jaffey also pointed out that at the time the Authority decided that seriousness was at level 3, it had also decided that the Applicants had “failed to ensure” that “the estimated quantum of the correction was brought to the attention of the Audit Committee and the Board”. However, on the basis of Ms Gillan’s evidence, the Authority subsequently accepted that the Board had been told during the October 2018 meeting that the current estimate was around £600m. Mr Jaffey said that, in consequence, the level of the penalty should be reduced.

However, we have found that some of the information provided to the Audit Committee and the Board was partial, some was wrong, and that the overall impression was misleading, see §§460ff. We also take into account that one of the relevant factors in deciding on the level of seriousness is whether there was “no or little loss or risk of loss to… investors or other market users individually and in general”. The breach in this case did expose investors to loss, see §575.

Taking into account all other relevant matters, including the seriousness of the breach; the fact that the Applicants were negligent rather than reckless and did not act deliberately, and that penalties are paid out of post-tax income, we agree with the Authority that level 3 penalties are appropriate.