The U.K. Financial Conduct Authority has widened the scope of its investigation into Metro Bank PLC's accounting error earlier this year to include certain members of the lender's management.
In a Sept. 17 prospectus for a £3 billion euro medium-term note program, the bank said the investigation relates to its regulatory reporting, governance system and the timing of announcements related to the blunder that the bank made when it miscategorized the risk weights assigned to a huge chunk of loans. The period covered by the expanded probe spans June 1, 2017, to Feb. 26, 2019, when the bank released a trading update for the final quarter of its 2018 fiscal year.
Metro Bank said it could take a significant financial hit and that the probe could lead to public censure, reputational impact and possible criminal or civil liability.
Shortly after the bank disclosed the error, the FCA and the Prudential Regulation Authority launched an initial investigation into how employees miscalculated the bank's risk-weighted assets, and the potential creation of a false market in the lender's shares.
The scandal has forced the bank to carry out a £375 million share placement to bolster its capital levels. Its share price has been hammered by the saga, falling more than 80%, according to the Financial Times.
The bank's shares opened in the red Sept. 18 and traded roughly 5% lower than the previous day's close as of 8:50 a.m. London time.
