According to the Financial Conduct Authority, the failings contributed to late and incomplete disclosure to the market of share dealings by two senior executives.
The group was required by the listing, disclosure and transparency rules to notify the market by the end of the next business day after it became aware of the share dealing but it failed to do so.
The FCA found that Reckitt Benckiser (RB) – which manufactures a range of household brands including Durex, Strepsil, Dettol and Nurofen – was also in breach of the Model Code. This is designed to ensure that senior executives do not abuse (or place themselves under the suspicion of abusing) inside information.
However, the regulator stressed, there was no suggestion that the senior executives concerned had been insider-dealing or had deliberately breached the code.
As well as the weak systems and controls which went undetected for seven years, RB kept inadequate records and staff were poorly trained. This meant that the group was unable to monitor share dealings properly that were carried out by third parties on behalf of its senior executives.
“Clear and timely disclosure of share dealings is an important way of ensuring that markets are fair and are seen to be fair,” commented Georgina Philippou, the FCA’s acting director of enforcement and market oversight.
“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.”
Had RB not agreed to settle at an early stage, it would have faced a fine of £771,190, rather than the £539,800 it paid.