Following the article in our July 2013 newsletter, the Financial Conduct Authority ("FCA") has now issued its Final Notice against Christopher Willford, former finance director of Bradford & Bingley, for breaching Principle 6 of the FCA's Statements of Principle for Approved Persons ("APER"). The Final Notice imposes a financial penalty of £30,000 on Mr Willford pursuant to Section 66 of the Financial Services and Markets Act 2000.


Christopher Willford, the former finance director of Bradford & Bingley ("B&B"), has been fined £30,000 by the FCA for failing to provide B&B's board with up-to-date information ahead of its collapse in 2008. Mr Willford received up-to-date information on B&B's financial position just days before its unsuccessful £300m rights issue.  This information should have been raised with the board.

Mr Willford acted as Group Finance Director at B&B between October 2005 and June 2009, and was responsible for leading B&B's finance function, which included responsibility for oversight of the production of financial forecasts and financial reports, and for escalating relevant information to the Executive Committee. Between 16 and 19 May 2008 (the "Relevant Period"), Mr Willford's performance of the CF1 function as Group Finance Director fell short of the then FSA's regulatory standards for approved persons. In particular, the FCA held that Mr Willford had failed to have "proper regard to the available financial information and its relevance to the aborted rights issue" and to "advise appropriately the board of [B&B]", in breach of Principle 6 of APER.

In October 2008, the FSA issued a decision notice providing for a fine of £100,000. Mr Willford appealed the decision via the judicial review process, on the grounds that the Regulatory Decisions Committee ("RDC") had failed to provide adequate reasons for its decision. The High Court quashed the FSA's decision notice. The FSA appealed this decision on the grounds that the case should not have been brought via judicial review and that sufficient reasons had in fact been provided. In R. (on the application of Christopher Willford) v Financial Services Authority (2013), the Court of Appeal overturned the first instance decision, finding (among other things) that the decision notice had provided Mr Willford with sufficient reasoning to enable him to understand why the notice had been issued. On 11 December 2013, the FCA issued a Final Notice imposing on Mr Willford a financial penalty of £30,000 for breaching Principle 6 of APER.

Final Notice

The Final Notice noted that Mr Willford's conduct fell below the FCA's regulatory standards for approved persons. In particular, Mr Willford did not "adequately review the financial information he received on 16 May 2008" (which included a draft Group results pack and a mortgage impairment paper), and as a consequence failed to note that those documents indicated a "possible material change in the financial outlook of [B&B]". In connection with authorising the release of a circular dated 19 May 2008 in connection with the rights issue, Mr Willford also failed to take steps to ensure that the financial information referred to above was available for consideration by the board or to ensure that any necessary follow up work to confirm the recent performance of B&B, and the outlook for its future performance, was "urgently carried out and completed prior to authorising the release of the Circular" (or deferring release of the Circular until such work had been done).

The Final Notice noted that Mr Willford's failings in this regard were particularly serious because Mr Willford was a senior and experienced finance professional of a large retail bank, who was expected to take full responsibility for advising the board in relation to finance matters, and because the rights issue was of "great importance" to B&B in light of the difficult market conditions in 2008. The Final Notice stated that the FCA took into account a number of factors in deciding upon a financial penalty of £30,000 including that the relevant events occurred during a time of "great pressure" on B&B, Mr Willford and the finance function generally; that other senior individuals at B&B also came to the conclusion that without further investigation the information received did not indicate a significant deterioration in B&B's outlook, and Mr Willford's failures did not cause or contribute to the failure of the rights issue or B&B's subsequent nationalisation.

The FCA also highlighted a number of mitigating factors, which served to reduce the level of fine originally proposed, including that: the degree of pressure on Mr Willford was exacerbated in May 2008 by the serious illness of B&B's CEO (which required him to step down); that Mr Willford's role as Group Finance Director of B&B was not confined to the traditional finance function (and included legal, group risk, compliance and group treasury) and in the circumstances Mr Willford felt he could rely on the Financial Controller, who was himself responsible for financial reporting; and that there was evidence that the board had contemporaneously considered whether further resources could be brought in to assist Mr Willford with his increased workload (but had considered that it would not be practical to do so in the required timescale).


The FCA's decision to impose a financial penalty of £30,000 on Mr Willford for breaches of Principle 6 of APER is further evidence of the regulator's increased focus on senior management responsibility. The FCA's Director of Financial Crime and Enforcement, Tracey McDermott, stated that senior managers should "expect the FCA to take action if they fail to show due skill, care and diligence".

However, overall, the Final Notice demonstrates the FCA's willingness to take into account the individual circumstances of a case in deciding upon the appropriate level of disciplinary sanction. The FCA's appreciation of the heightened pressure faced by Mr Willford at B&B due to unprecedented increases in workload, senior management absences, and Mr Willford's other wide-ranging managerial responsibilities was a key factor in reducing the level of the fine. The Final Notice also confirms that the size of a disciplinary fine in such circumstances will reflect not only the length and timing of any misconduct, but also its material impact on business activities. In this case, the FCA made clear that Mr Willford's conduct in no way caused or contributed to the failure of the rights issue or B&B's subsequent nationalisation.