29 January 2015
Reckitt Benckiser has been fined by the Financial Conduct Authority (FCA) for listing rule failures.
The major consumer goods company has been fined £539,800 for inadequate systems and controls to monitor share-dealing by its senior executives in its own shares. This contributed to late and incomplete disclosure to the market of share dealings by two senior executives.
Key requirements in the listing, disclosure and transparency rules were breached by Reckitt Benckiser, and it failed to identify breaches of the Model Code.
The Model Code is designed to ensure that senior executives (persons discharging managerial responsibilities) do not abuse, and do not place themselves under the suspicion of abusing, inside information. According to the FCA, there is no suggestion that the senior executives concerned traded on the basis of inside information or deliberately breached the Model Code.
Weaknesses in the company’s systems and controls between July 2005 and October 2012 were compounded by inadequate records and training and left Reckitt Benckiser unable to properly monitor share dealings made on behalf of its senior executives by third parties.
When it became aware of the share dealing by its senior executives, the company should have notified the market by the end of the next business day but failed to do so.
FCA's acting director of enforcement and market oversight, Georgina Philippou, said: ‘Clear and timely disclosure of share dealings is an important way of ensuring that markets are fair and are seen to be fair. RB failed on a number of counts in relation to share dealing by two of its senior executives over a number of years. The FCA expects all listed companies to learn the lessons from this case and to ensure they have the right controls and training in place.’