Ex-Bosses Of Failed Bank HBOS Face Probe

Former bosses of failed bank HBOS are to be investigated in a probe that could see them banned from working in banking again.

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are to investigate "certain" bosses at the bank in the run-up to its collapse.

It (Other OTC: ITGL - news) comes after a damning report last November by Andrew Green QC, which blasted former regulators for their failure to probe a raft of executives.

It also called for further investigations into 10 senior managers, including ex-chief executives Andy Hornby and James Crosby, as well as past chairman Lord Stevenson.

The FCA and PRA said their inquiries would "determine whether or not any prohibition proceedings should be commenced" against the former bosses.

They could face being struck off from working in the financial services industry, while the Insolvency Service also has the power to ban them from being company directors.

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

The watchdogs did not name the ex-managers who will be investigated.

However, Mr Hornby, Mr Crosby and Lord Stevenson were named in Mr Green's report, as well as a raft of other executives he said the former regulator, the Financial Services Authority (FSA), should have probed.

These included Mike Ellis, former finance director, Colin Matthew, ex-head of the international division, and Lindsay Mackay, former boss of the treasury division.

Mr Ellis is currently chairman of Skipton Building Society, while Mr Mackay is a director of Alpha Bank (Other OTC: ALBWF - news) .

Mr Hornby is chief operating officer of Gala Coral and Lord Stevenson has a number of positions, including at book group Waterstones Holdings where he is a non-executive director. Mr Crosby is largely retired.

Alongside the Green report, the FCA and PRA published their own delayed review of the HBOS saga , which put the blame firmly on the bank's executives, saying they were "ultimately responsible" for its demise.

The bank had to be rescued by Lloyds and bailed out with £20.5bn of taxpayer's money in 2008.

So far, formal action has only been taken against one former HBOS executive - Peter Cummings, who ran the bank's commercial arm. He was fined £500,000 and banned for life from working in the City.