PRA and FCA conclude investigations into HBOS with no further action taken

The investigations, which began in 2016, were in response to Andrew Green QC’s November 2015 report into the reasonableness of the scope of the FSA’s enforcement investigations in relation to the failure of HBOS.

In 2009, the FSA, the sole UK financial regulator of HBOS at the time, commenced enforcement investigations in connection with the 2008 failure of HBOS. Those investigations resulted in the FSA taking enforcement action in 2012 against the Bank of Scotland and the CEO of HBOS’ Corporate Division.

The Green Report recommended that the Authorities consider afresh whether or not to undertake investigations into any other former HBOS senior managers.

The Authorities’ joint investigations considered the performance of certain former senior managers at HBOS in the years before its failure. The investigations considered whether or not those individuals should be subject to a prohibition order which would prohibit them from performing certain roles within the financial services industry.

Evidence was gathered in order to assess whether or not each individual may lack fitness and propriety to hold certain senior roles within the financial services industry in the future. In the course of these investigations, the Authorities gathered more than 2 million documents, interviewed former HBOS senior managers, and undertook analysis of contemporaneous documentary evidence considering the managers’ roles and responsibilities at HBOS prior to its failure in 2008.

The Authorities have each determined that no enforcement action should be taken against these former HBOS senior managers and the investigations have therefore been closed.