[2025] UKUT 00185 (TCC)

The Authority’s position was that the Applicants had acted negligently and their misconduct was serious, and it was therefore appropriate to impose a financial penalty rather than issue a public censure.In relation to “the impact of the breach”, the Authority found as follows in relation to both Applicants:

“Metro Bank is a premium listed issuer that was listed on the FTSE 250 at the time of the breach. The Bank’s inclusion of a total RWA figure calculated using the incorrect CLIP Loans risk weight, without any qualification, had the potential to mislead its investors and affect the import of the information contained in the October Announcement. The fact that, following the January 2019 announcement, there was a drop in Metro Bank’s share price of 39% on the day of the announcement and adverse market commentary indicates that Metro Bank’s breach of LR 1.3.3R, in respect of which [each Applicant] was knowingly concerned, had a serious adverse effect on financial markets and risked damaging confidence in the financial markets (6.5B.2G(8)(f)).

The existence of the CLIP Loans error only became known to investors three months after the breach, when the January 2019 announcement was released. This delay caused a risk of loss to new and existing individual shareholders who traded between the October Announcement and the January 2019 announcement (DEPP 6.5B.2G(8)(c)).”

The Authority accepted that the 39% drop in the Bank’s share price was not solely attributable to the incorrect RWAs for the CLIP loans,but said it “played a substantial part in that fall”, and that failure to inform the market of the true position meant that investors proceeded under the positive misapprehension that the published RWA figure was reliable, when it was not.

In relation to the nature of the breach, the Authority took into account that as CEO and CFO, both Applicants held senior positions within the Bank (DEPP 6.5B.2G(9)(k)), although in relation to Mr Arden, the Authority noted that he did not “have significant industry experience, with this being his first senior role at a listed firm”.

The Authority also found that the Applicants were both:

“…aware that Metro Bank calculated the total RWA figure in its October Announcement by, amongst other things, incorrectly applying a risk weighting of 50% to its CLIP Loans and failed to take adequate steps to ensure that Metro Bank complied with LR 1.3.3R. [They] failed to ensure that Metro Bank considered whether the October Announcement ought to have included a qualification or sought legal advice or input from its professional advisers on this question. [They] also failed to ensure that the Audit Committee and the Board considered whether the inclusion of the inaccurate RWA figure in the October Announcement without any qualification was appropriate (DEPP 6.5B.2G(9)(n)).”