FORMER senior managers at HBOS could be banned from working in the City after regulators announced they would launch long-awaited investigations.
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) will commence probes into “certain” bosses at the failed bank.
It comes after a damning report last November by Andrew Green QC, which blasted former regulators for a failure to investigate some executives and called for further probes into up to ten top managers, including ex-chief executives Andy Hornby and James Crosby, as well as past chairman Lord Stevenson.
The FCA and PRA said their investigations would “determine whether or not any prohibition proceedings should be commenced” against former bosses.
They could face being struck off from financial services industry jobs, while the Insolvency Service also has the power to ban them from being company directors.
The FCA and PRA will also “review materials with a view to making further decisions regarding other former HBOS senior managers”.
The watchdogs did not name the former managers who will be investigated. But Mr Hornby, Mr Crosby and Lord Stevenson were named in Mr Green’s report at the end of 2015, as well as other executives.
These included former finance director Mike Ellis, Colin Matthew, ex-head of the international division, and former treasury division boss Lindsay Mackay.
Alongside the Green report, the FCA and PRA last November published their delayed review of the HBOS saga, which put the blame firmly on the bank’s executives, saying they were “ultimately responsible” for HBOS’ demise. The bank had to be rescued by Lloyds and bailed out with £20.5 billion of taxpayer cash in 2008.
Formal action has only been taken against one former HBOS executive, Peter Cummings, who ran the commercial arm at HBOS. He was fined £500,000 and banned for life from working in the City.
Mr Green said in his report that former regulator the Financial Services Authority’s failure to investigate senior management more was “not reasonable”.
Regulators are powerless to levy fines against any managers deemed responsible due to the time that has passed. But the potential bans could have implications for ex-managers.
Mr Ellis is currently chairman of Skipton Building Society, Mr Mackay is an Alpha Bank director and Mr Hornby is chief operating officer of Gala Coral, which is being taken over by Ladbrokes to create a £2.3 billion gambling giant.
Lord Stevenson has numerous positions, including at Waterstones Holdings as a non-executive director.
Mr Crosby was stripped of his knighthood at his own request following a report by MPs and peers into HBOS in 2013, which said he was the “architect of the strategy that set the course for disaster”.