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Finally! City regulators investigate former HBOS bosses

More than seven years after the collapse of HBOS, City regulators have begun an investigation into the failed bank's former bosses.

Finally! City regulators investigate former HBOS bosses

More than seven years after the collapse of HBOS, City regulators have finally opened investigations into the former bosses of the bank, which was rescued by Lloyds and the government at the height of the financial crisis.

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have started investigations into 'certain former HBOS senior managers' after a damning report from lawyer Andrew Green into regulators' handling of the bank's failure.

Only one of HBOS's bosses - director Peter Cummings - was sanctioned over the crisis, which saw HBOS bought by Lloyds and the government bailing out the combined group at a cost of £20.5 billion.

Green last year said regulators should 'do what their predecessor, the Financial Services Authority (FSA) failed to do' and examine the case for investigating those who led the bank to its failure.

The FCA and PRA did not give any details on the identities of those they were investigating. 'These investigations will determine whether or not any prohibition proceedings should be commenced against the,' they said. 'The FCA and PRA continue to review materials with a view to making further decisions regarding other former HBOS senior managers.'

In his report, Green said the FSA's decision to focus solely on Cummings was wrong and that the regulator should have investigated more HBOS staff, including former chief executive Andy Hornby, former chairman Dennis Stevenson and former group finance director Mike Ellis.

He detailed in his report the FSA's consideration of an investigation into Hornby, but could find no documentation of the case being dropped.

While the former bosses could be banned from working in financial services as a result of the regulators' investigations, it is now too late for them to receive fines for their actions.

The regulators' move comes as the FCA faces scrutiny over its decision to drop a review of banking culture and an inquiry into allegations HSBC's Swiss private bank helped wealthy clients avoid tax. The regulator was this month forced to deny the inquiries were dropped due to pressure from the Treasury.

8 comments so far. Why not have your say?

Anonymous 1 needed this 'off the record'

Jan 28, 2016 at 15:19

Surely the regulator will have to also investigate Gordon Brown , Alistair Darling and the Treasury as they were the architects of this scheme!

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Anonymous 2 needed this 'off the record'

Jan 28, 2016 at 15:57

Also why leave out the directors of Barclays Bank...why on earth not go for them too ?...for they seemingly were involved in the fraudulent rigging of LIBOR.

At least the HBOS crew were only merely incompetent.

I imagine in that case as well that you may again have to bring Gordon Brown (and indeed other high "worthies") into the investigatory net as they may well have guided the illegal lo-balling of the interbank rate by Barclays.

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Jim Waddington

Jan 28, 2016 at 16:08

No worries for HBOS then or these ex-bosses.... given the dead sheep recently appointed to head up the FCA... should think he will be writing references for any jobs these gentlemen are now applying for!

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David Lines

Jan 28, 2016 at 16:24

Having failed to catch HBOS when it happened, I'd be surprised if the FSA / FCA could investigate anything, after all what else were they doing but monitor the industry. Having said that, Crosby, Stevenson et al should be taken to the cleaners for destroying a perfectly good business - it was they who sacked the Corporate Risk Manager when he flagged up the developing problem.

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Keith Cobby

Jan 28, 2016 at 17:52

And Andy Hornby, remember him. He was top of his class at Harvard Business School. I wonder how the 799 people below him have fared.

This reference to HBOS always reminds me of the Terry Wogan joke about banking qualifications.

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Anonymous 3 needed this 'off the record'

Jan 29, 2016 at 23:46

if a company goes bust where does the money come from to pay the huge pensions these directors are getting......

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Jan 30, 2016 at 22:37

From us taxpayers. The HBOS and RBS bankers should have got the pensions 'compensation' that would have applied to any other business that went bust. So Pensions Protection Fund compensation of at most about £30k a year. Not the hundreds of thousands a year that many of he most senior have walked away with, even after some of them 'voluntarily' gave part of their pensions. It's a disgraceful case of the incompetent establishment protecting their own.

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Anonymous 3 needed this 'off the record'

Jan 31, 2016 at 11:28

mike-its a scandal that still makes my blood boil

i wonder how many would support a petition for a house of commons investigation...even if nothing could be done at least it would keep the issue highlighted and the law could be changed so it is not allowed to happen again.

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