HBOS Three could face bans
But delays mean former chiefs cannot be fined
THREE former bosses who have been blamed for the downfall of HBOS could face lifetime bans from the financial services industry after a report into the lender’s collapse is finally published this week.
James Crosby and Andy Hornby, the bank’s last two chief executives, are likely to be harshly criticised, as is former chairman Lord (Dennis) Stevenson.
But in a revelation that will anger millions of savers, borrowers and small shareholders, it emerged this weekend that the trio cannot be fined.
That is because the muchdelayed report into the disaster has taken so long to produce.
The only person to suffer a financial penalty in connection with HBOS is former corporate lending supremo Peter Cummings. The Scotsman was given a lifelong ban and a £500,000 penalty three years ago.
At that time, the regulators also quietly decided not to pursue financial penalties against Crosby, Hornby or Stevenson, even though they were Cummings’ superiors. That decision was not explicitly spelled out to the public.
City watchdogs cannot now impose financial penalties on the three men as regulators must warn people within six years if they plan to do so. The deadline passed last year.
The conduct of former regulator the Financial Services Authority – which has now been disbanded – is also likely to be lambasted.
An independent investigation into the decisions it made about disciplinary actions against HBOS grandees is being conducted by Andrew Green QC.
His findings will be published on Thursday alongside the main report.
Green was appointed to ‘consider afresh’ whether any former members of HBOS senior management should be investigated, with a view to banning them from the industry. If his findings are very damning, then moves to ban the trio may be started.
Neither Lord Stevenson, 70, nor James Crosby, 59, are currently active as executives in the finance sector. Hornby, 48, is chief executive of Coral Retail, part of gambling group Gala Coral.
A report by the Parliamentary Commission on Banking Standards in 2013 found that there had been ‘catastrophic failures of management, governance and regulatory oversight’ at HBOS.
It said primary responsibility rested with Crosby, ‘the architect of the strategy that set the course for disaster’, with Hornby, who was ‘unable or unwilling’ to change course and Stevenson, who presided over the bank board.