Former HBOS heads considers legal action against City regulators threatening proceedings against them
Jan 29, 2016 09:19 AM EST
A group of former HBOS heads are considering taking legal steps against City regulators if they file a formal petition to ban the bank managers from working in Britain financial industry. The U.K. Financial Conduct Authority and the Prudential Regulation Authority will probe certain former senior managers of the collapsed bank and might consider banning 10 executives.
According to Sky News, the former executive of HBOS were given legal advice that they may not get fair hearing during the proceedings as the official inquiry on the collapse has been published. If the former managers would legally challenge the watchdogs, it will be harder for the regulators to take actions against the ex-HBOS heads. The bank failed more than seven years ago, leading to a £20.5bn taxpayer bailout.
MarketWatch reported that the FCA and PRA announced Thursday their plans to probe certain former HBOS managers to determine what actions should be taken against them. This investigation comes after PRA chief executive Andrew Baily released a report recommending the watchdogs about putting certain ex-HBOS managers under enforcement investigation.
"These investigations will determine whether or not any prohibition proceedings should be commenced against them," according to a joint statement by FCA and PRA. "The FCA and PRA continue to review materials with a view to making further decisions regarding other former HBOS senior managers."
The decision to probe the managers comes after FCA and PRA published a report November lashing on the HBOS exec's part in the fall of the bank and the state-sponsored merger with Lloyds Banking Group. Telegraph wrote that according to the statement, they are considering banning some 10 executives from taking up jobs in the financial service industry. However, since the 2008 financial crisis happened a long time ago, fining them would be difficult.
The report last year blamed the former bank managers for the decisions they made that triggered the collapse of the bank during the financial crisis in 2008. It shows how the bank expanded its balance sheet to uncontrolled expansion to £690bn in 2008, from only £477bn in 2004.