Investigation launched into HBOS managers’ conduct after bank failure

THE Financial Conduct Authority (FCA) has announced it will begin its own investigations into the conduct of some former HBOS managers following the publication of highly-critical reports by Andrew Green QC the Bank of England and the FCA in November .

Mike Ellis, the chairman of Skipton Building Society, was one of 10 senior managers named in the report.

To date, only Peter Cummings, who was head of corporate lending at HBOS, has been punished for his role. He was banned from taking another senior banking role and fined £500,000, but his colleagues all escaped individual investigation.

However the November reports were critical of 10 former HBOS executives, including Mr Ellis, group chief executive Andy Hornby and the former chairman Lord Stevenson.

Mr Green said the FSA’s failure to investigate further was “not reasonable” and its reasoning for not doing so was “materially flawed”.

That has led to today’s announcement that an investigation by the FCA – which is the successor to the FSA – is to begin.

In a statement, the FCA said: “These investigations will determine whether or not any prohibition proceedings should be commenced against them. The FCA and PRA continue to review materials with a view to making further decisions regarding other former HBOS senior managers.”

Following the publication of the reports, Skipton said Mr Ellis retained the “wholehearted confidence” of the board.