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FCA and PRA to investigate individual HBOS managers

  • 28/01/2016
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FCA and PRA to investigate individual HBOS managers
A number of former senior managers at failed bank HBOS will be investigated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), the regulators have confirmed.

The FCA said the investigations would determine whether or not any prohibition proceedings should be carried out against certain individuals.

The announcement comes shortly after the Financial Reporting Council (FRC) said it would conduct preliminary enquiries into KPMG’s audit of HBOS’s books in the run up to its collapse.

The accountancy regulator came under fire in December, after it emerged that a decision was taken not to investigate KPMG’s audit process before a draft of the final report from the review team at the FSA into practices at the bank was seen.

HBOS, previously the UK’s largest mortgage lender, was acquired by Lloyds Banking Group in 2009 after it experienced plummeting profits in the build up to the 2008 financial crisis.

A joint report published by the PRA and FCA in November suggested that individuals responsible for the bank’s failure should face a ban from working in the financial services sector. It named former chairman Lord Stevenson, and chief executives James Crosby and Andy Hornby as key players in the bank’s wrongdoing.

An additional report conducted by Andrew Green QC into how the Financial Services Authority investigated proceedings at HBOS found just one person, Peter Cummins CEO of the corporate division, responsible.

The FCA and PRA said it would continue to review materials with a view to making further decisions regarding other former HBOS senior managers.

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