FORMER senior managers at HBOS in the run-up to its collapse 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) said they would start probes into “certain” bosses at the failed bank.
However, Jeremy Roe, the chairman of Bully Banks, an organisation that campaigns on behalf of people who claim to have been mis-sold complex products by the big banks, said he was bemused by the announcement.
Mr Roe said: “How much time has to lapse before the FCA and the PRA take effective action? The adage that justice delayed is justice denied is never more apt than when the financial regulators are under discussion.
“The banning of individuals who are approaching the end of their career is not enough of a penalty, particularly when it has already taken the regulators over seven years to reach a decision that they are about to start investigations.”
The regulators’ announcement comes after a damning report last November by Andrew Green QC, which blasted former regulators for their failure to investigate a raft of executives and called for further probes into up to 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 investigations 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 directors of any company.
The FCA and PRA also said they would “review materials with a view to making further decisions regarding other former HBOS senior managers”.
An FCA spokesman said the regulators would not reveal the names of the individuals concerned, or how many people were being investigated .
Mr Hornby, Mr Crosby and Lord Stevenson were named in Mr Green’s scathing report at the end of last year, as well as other executives he said the former regulator, the Financial Services Authority (FSA), should have investigated.
These included Mike Ellis, the former finance director, Colin Matthew, ex-head of the international division, and Lindsay Mackay, former boss of the treasury division.
Alongside the Green report, the FCA and PRA last November published their much-delayed review of the HBOS saga, which put the blame firmly on the bank’s executives, saying they were ‘’ultimately responsible’’ for the demise of HBOS.
The bank had to be rescued by Lloyds and bailed out with £20.5 billion of taxpayer cash in 2008.
So far, 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 the FSA’s failure not to investigate senior management more broadly was ‘’not reasonable’’.
Regulators are now left powerless to levy fines against any managers deemed responsible due to the length of time that has passed.
Mr Ellis is currently chairman of Skipton Building Society, while Mr Mackay is a director of Alpha Bank.
Mr Hornby is chief operating officer of Gala Coral - which is being taken over by rival Ladbrokes to create a gambling giant.
Lord Stevenson has a number of positions, including at book group Waterstones Holdings where he is a non-executive director, while Mr Crosby is largely retired.
Mr Crosby, who lives near Harrogate, 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’’.
Yesterday, a spokesman for Skipton Building Society said: “Neither Skipton Building Society nor Mike Ellis have been contacted by the PRA/FCA regarding the regulators’ announcement made earlier today and it’s therefore inappropriate for us to make any further comment.”
A spokesman for Gala Coral said: “Andy Hornby has been a key member of Gala Coral Group’s management team for nearly five years, most recently as COO.
“During this time he has played a central role in the transformation of the business and has earned the continuing support of our colleagues, management and shareholders. Gala Coral Group is not in a position to comment on events relating to another organisation and sector some eight years ago.”
A spokesman for Waterstones confirmed that Lord Stevenson is still a non-executive director.
The spokesman added: “We are booksellers and do not involve ourselves with financial services.”