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FCA Fines Bank of Scotland For Not Reporting Fraud Suspicions at HBOS Reading

FCA Fines Bank of Scotland For Not Reporting Fraud Suspicions at HBOS Reading

The FCA (Financial Conduct Authority) has fined Bank of Scotland a hefty £45.5m for its part in failing to report suspicions of fraudulent activity after six bankers were jailed in 2017 for their involvement in a £245 million loan scam.

Suspicions of wrongdoing arose around the Reading based Impaired Assets (IAR) team at Halifax Bank of Scotland.

Six bankers including former senior HBOS manager Lynden Scourfield took part in the record scam between 2003 and 2007 which, sanctioned by Scourfield applied massive credit limits and borrowing to small business which then struggled to repay the debt. Scourfield was sentenced to 11 years and three months in prison for his part in the fraud.

The FCA said ‘Bank of Scotland failed to alert the regulator and the police about suspicions of fraud at its Reading branch when those suspicions first became apparent.​​​​​ BOS’s failures caused delays to the investigations by both the FCA and Thames Valley Police’.

After agreeing with the watchdog’s finding Bank of Scotland received a lesser fine. The FCA said the financial penalty for non-agreement could have been the full penalty of £65m.

source: https://www.fca.org.uk