Collapsed builder Carillion and some of its executive directors were "reckless" in failing to ensure that their public announcements did not mislead investors, Britain's Financial Conduct Authority said today.
Carillion went into liquidiation in January 2018, triggering Britain's biggest corporate failure in a decade that forced the government to step in to guarantee public services from school meals to roadworks.
The FCA issued a formal "warning notice" today to Carillion and certain former executive directors that it did not name, setting out alleged breaches of securities rules.
"They made misleadingly positive statements about Carillion's financial performance generally and in relation to its UK construction business in particular, which did not reflect significant deteriorations in the expected financial performance of that business and the increasing financial risks associated with it," the FCA said.
The parties have a right to challenge the FCA's findings at an independent committee that will decide if sanctions are warranted.
They can then appeal any decision at an Upper Tribunal.
The FCA said that between July 2016 and July 2017 Carillion breached several listing and market abuse rules aimed at stopping the dissemination of information that gives false or misleading signals as to the value of the company's shares.
It said the relevant executive directors were knowingly involved in the above breaches by Carillion and each was aware of the deteriorating expected financial performance within the UK construction business.
"The FCA considers that Carillion and the relevant executive directors acted recklessly in relation to the above matters," it added.