FCA and PRA investigating HBOS managers

FCA logo glass 620x430The Financial Conduct Authority and Prudential Regulation Authority are investigating some former HBOS senior managers about their role in the failure in the bank.

The FCA says the investigations will “determine whether or not any prohibition proceedings should be commenced against them”.

It adds: “The FCA and PRA continue to review materials with a view to making further decisions regarding other former HBOS senior managers.”

The regulator’s announcement follows a report by Andrew Green QC about the FSA’s enforcement activity after HBOS’ failure.

The long-awaited report criticised the FSA for its “flawed” investigation into the bank.

The report concluded that ultimate responsibility for the failure of HBOS rests with the board and senior management.

It said the FSA failed to give proper consideration to investigating other senior individuals and the bank itself.

Only one former HBOS director, Peter Cummings, was fined in the aftermath of HBOS’ failure.

The FCA was criticised in December 2015 after admitting it would be unable to fine any former HBOS executives because the bank’s failure fell outside the six-year statute of limitation on fines.

The regulator remains able to ban ex-HBOS directors from the financial services sector. However, former HBOS chief executives Andy Hornby and James Crosby and former chairman Lord Stevenson no longer hold an active registration as an approved person.

Greens’ report recommends that the PRA and FCA should now consider whether any former senior managers of HBOS should be the subject of an enforcement investigation with a view to enforcing bans.