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Ex-Bradford & Bingley Banker May Be Fined in Secret FCA Case

Ex-Bradford & Bingley Banker May Be Fined in Secret FCA Dispute
Chris Willford, former group finance director at nationalized lender Bradford & Bingley Plc, may be didn’t "see how bad the situation was," FCA lawyer Brindle said in the February hearing. Photographer: Chris Ratcliffe /Bloomberg

Chris Willford, former group finance director at nationalized lender Bradford & Bingley Plc, may be fined as much as 100,000 pounds ($157,000) for risk management failures after losing a court appeal today.

The U.K. Financial Conduct Authority’s predecessor properly notified Willford of the fine in 2010, Judge Martin Moore-Bick said. Willford’s identity had been secret throughout the three-year-old dispute until the court today overturned restrictions that limited the press to calling him “C.”

Bradford & Bingley was rescued by the British government in 2008 after credit markets froze in the wake of Lehman Brothers Holdings Inc.’s collapse. Willford didn’t do enough to warn the board about its deteriorating financial position, FCA lawyer Michael Brindle said at a February court hearing.

The FCA’s decision to fine Willford 100,000 pounds was overturned by a judge in May 2012 because he ruled the regulator, then known as the Financial Services Authority, didn’t give proper reasons in the notice of its decision. The court of appeal reversed that ruling.

It wasn’t necessary for the FCA to “discuss all the arguments in detail or to give more extended reasons for its findings,” Judge Moore-Bick said in a written decision.

The fine hasn’t been confirmed and Willford may still challenge it at the Upper Tribunal, another court dealing with regulatory disputes.

Willford is now chief operating officer at online storage company My Wealth Cloud. Nikunj Kiri, his lawyer, declined to comment after the ruling. Chris Hamilton, a spokesman for the FCA, also declined to comment.

2008 Seizure

Bradford & Bingley, which was the U.K.’s biggest lender to landlords, was left struggling to fund its operations when credit markets contracted. The bank made three attempts to replenish its capital before being seized in September 2008.

Willford didn’t “see how bad the situation was,” FCA lawyer Brindle said in the February hearing. Willford was paid 500,000 pounds when he left Bradford & Bingley in June 2009.

Judge Moore-Bick rejected Willford’s request for an extension of the privacy order, saying the purpose of the proceedings weren’t “to protect Mr. Willford’s privacy.”

They were to “ensure that the procedure adopted by the FSA complies with the statutory requirements,” Moore-Bick said.

A U.K. lawmaker who has pushed for transparency in British courts, praised the ruling.

Secret Justice

“Secret justice is unreliable and works against the rule of law,” John Hemming, a Liberal Democrat member of the House of Commons, said in an e-mail. “I am not quite sure why any of this process should have been subject to an anonymity order. However, things have been put right now.”

The FCA has faced pressure to punish those who oversaw the failure of British banks. Three former executives at nationalized Northern Rock Plc were fined and banned from working in the industry in 2010, while HBOS Plc’s highest paid banker Peter Cummings was fined 500,000 pounds and banned in 2012.

The regulator cleared executives at Royal Bank of Scotland Group Plc including former Chief Executive Officer Fred Goodwin of wrongdoing, before it published a report criticizing management decisions that contributed to its near-failure.

The case is The Queen on the Application of Christopher Willford v. Financial Services Authority, Court of Appeal, Queen’s Bench Division (Administrative Court) C1/2012/1551

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