Co-op Bank former CEO admits misconduct

Co-op Bank former CEO admits misconduct

The former chief executive of the Co-operative Bank has admitted misconduct and agreed to pay £20,000 towards the Financial Reporting Council’s legal costs.

Barry Tootell, who was chief financial officer of the Co-op Bank as well as chief executive, also agreed to a six-year ban on membership of the Institute of Chartered Accountants in England and Wales.

The admission comes nine months after the Prudential Regulatory Authority banned Mr Tootell from holding senior management positions at PRA-regulated firms, and fined him £173,802. 

Keith Alderson, the bank's former managing director, received the same ban and an £88,890 fine.

In a statement on Friday (28 October), the FRC said that between 1 January 2009 and 10 May 2013, Mr Tootell breached rules stipulating that an "approved person" must exercise "due skill, care and diligence in managing the firm for which he is responsible in his accountable function".

The FRC added that, during the same period, Tootell was "knowingly concerned in the contravention" of a Co-op Bank principle "to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems".

Gareth Rees QC, executive counsel to the FRC, said Mr Tootell's exclusion from the ICAEW sent "a clear message to accountants of the high standards of professional conduct expected of them when undertaking important roles within business".

He continued: "The sanction reflects the significance of the misconduct by a CFO and CEO of a major UK bank, and the need to promote public and market confidence in the accountancy profession and the quality of corporate reporting in this sector."

He said Mr Tootell's decision to admit misconduct had led to "a considerable saving of time and cost”.

Mr Tootell's admission comes more than three years after he resigned as chief executive of Co-op Bank, after ratings agency Moody's downgraded the bank's credit rating to junk status.