At the start of this year, the Financial Conduct Authority (FCA) issued Final Notices against two former finance directors of Carillion plc, Mr Adam and Mr Khan, in connection with misleading announcements, having reached a settlement with them ahead of the Upper Tribunal proceedings. We previously wrote about this development in our Notice in a Nutshell on these cases.

Subsequent to our briefing: 

1. in February 2026, the FCA issued a Final Notice to Richard Howson, the former chief executive of Carillion plc, having reached a settlement with him involving a fine of £237,700 in relation to his involvement in misleading announcements made by Carillion; and
2. in April 2026, the FCA published Primary Market Bulletin 62 which describes some key features of the FCA’s decisions related to Carillion. 

We set out further detail on these developments below. 

FCA Final Notice: Richard Howson

As with the Final Notices against Mr Adam and Mr Khan, the FCA found that Mr Howson was knowingly concerned in breaches by Carillion of:

• Article 15 of the Market Abuse Regulation (MAR) (prohibition of market manipulation);
• Listing Rule 1.3.3R (misleading information must not be published);
• Listing Principle 1 (procedures, systems and controls); and
• Premium Listing Principle 2 (acting with integrity). 

The FCA found that certain of Carillion’s market announcements were misleading, were made recklessly, and did not accurately or fully disclose the true financial performance of Carillion. The announcements made positive statements about Carillion’s financial performance generally and failed to disclose significant deteriorations in the expected performance of projects and did not take account of a series of warning signs indicating anticipated losses and/ or reduced profitability across a number of projects. 

Whilst financial risks and exposures were reported to Mr Howson, the FCA found that he failed to bring matters to the attention of the Board and Audit Committee and was aware that reports made to the Board and Audit Committee painted a much more optimistic picture as regards financial performance than was being reported internally. Furthermore, as CEO and one of only two executive directors, Mr Howson had a central role in reviewing the market announcements and approving them as a Board member and did so in the knowledge of information reported to him that was materially inconsistent with the positive statements made in the announcements. The FCA’s view was that signing off on positive market announcements, despite clear warning signs about significant deterioration in performance, was a serious form of recklessness which amounted to an “ethical or moral failing”. 

The knowledge of Mr Howson (and another person) was attributed to Carillion and, as a result, Carillion ought to have known that information disseminated was false or misleading. The FCA concluded it was not necessary to prove actual knowledge on the part of Mr Howson that announcements were false or misleading for Carillion to be in breach of MAR or for him to be knowingly concerned in that breach. 

Carillion also failed to take reasonable steps to establish and maintain adequate procedures, systems and controls and, as the Group CEO with responsibility for ensuring that Carillion had adequate procedures, systems and controls for financial reporting and the Board member with the most construction and contracting expertise, Mr Howson was knowingly concerned in the company’s breach of Listing Principle 1. He had a responsibility to work closely with the Group FD to ensure there were appropriate internal control processes and that Carillion communicated effectively with investors.   

In calculating the penalty, the FCA took into account a number of factors including recognising that Mr Howson was not an accountant and primary responsibility for financial reporting and ensuring financial information was disseminated to the market was accurate and not misleading rested with the Group FD.

Mr Howson’s extensive cooperation during the FCA’s investigations, including his voluntary attendance at interview as well as his cooperation during investigations by other bodies and his statements in sworn evidence in other related proceedings that he would not contest certain allegations made against him resulted in the FCA applying a 20 percent discount to his fine for mitigating factors (as compared to the 10 percent discount given to Mr Adam and Mr Khan).   

Listed companies, regulated firms and individuals in senior positions should have regard to the Key Takeaways set out in our previous Notice in a Nutshell.

Primary Market Bulletin 62

Primary Market Bulletin 62 describes some key features of the FCA’s decisions related to Carillion. In particular, the Market Bulletin provides insight into the FCA’s views on the application of the ‘ought to have known’ element of MAR.

In the Market Bulletin, the FCA states that Carillion’s breach of Article 15 of MAR (by disseminating information that gave false or misleading signals about its share price in circumstances where it ought to have known this information was false or misleading) is based on attributing to Carillion certain knowledge of its former directors, as a result of which Carillion ought to have known that the announcements were false or misleading. The test to establish whether Carillion/ its former directors ought to have known that this information was false or misleading is an objective one. This means that, if a reasonable person in their position ought to have known the information in the announcements gave, or was likely to give, false or misleading signals as to Carillion’s share price, Carillion would commit market manipulation as defined in MAR (Article 12(1)(c)). The knowledge of a company’s directors, as well as other employees or agents, may be attributable to the company for these purposes.

In this case, the FCA found that all of Mr Adam, Mr Howson and Mr Khan were provided with sufficient information regarding Carillion’s financial performance such that they were aware that there was a risk that the announcements were false or misleading. The FCA found that they did not respond appropriately to this risk and failed to take it properly into account when reviewing and approving the announcements as Board members. They also failed to inform the Board and the Audit Committee about these matters for the purpose of their review and approval of the announcements, despite the fact they must have been aware these matters would be highly relevant to the decision-making of the Board and the Audit Committee.

The FCA therefore concluded that Mr Adam, Mr Howson and Mr Khan acted recklessly and attributed to Carillion the state of mind of its directors which meant that Carillion’s breach of Article 15 of MAR was committed recklessly.

The Market Bulletin emphasises the high standard of disclosures expected of listed companies and the need to maintain adequate procedures, systems and controls. It also highlights the willingness of the FCA to hold executives to account for breaches by issuers, underscored by the Financial Reporting Council’s (FRC) 2024 UK Corporate Governance Code’s introduction of board accountability for effective internal controls at listed companies.  

Of note, in addition to the above developments, earlier this month the FRC also imposed sanctions on individual Carillion accountants, including its finance directors, Mr Adam and Mr Khan, for acting recklessly and failing to act with integrity in connection with the preparation of the accounting information for Carillion’s financial statements.

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