FSA has fined Peter Cummings, former executive director of HBOS, £500,000 and banned him from holding any senior position in a regulated firm. Mr Cummings managed the Corporate Division at HBOS. FSA found that Mr Cummings:
- pursued an aggressive expansion strategy which involved consistently taking an optimistic view and failing to address risks and concerns as they arose, although he knew about a number of systems and control failings within the division;
- failed to exercise due skill, care and diligence by pursuing an aggressive expansion strategy within the division he managed over a two-year period, without suitable controls in place to manage the associated risks;
- failed for eight months to take reasonable care to ensure that his division adequately and prudently managed high value transactions that showed signs of stress; and
- during the financial crisis, raised his targets as other banks were pulling out of relevant markets.
FSA noted that some failings were present before Mr Cummings took on his role, acknowledged he had tried to make some improvements and acknowledged he had not taken all key decisions alone. Nevertheless, it found he had breached Principle 6 of the Principles for Approved Persons. It also found he was knowingly concerned in the misconduct which led to FSA taking enforcement action against Bank of Scotland in relation to the failings (the Final Notice for which was published in March 2012). FSA said that, now the investigation is complete, it can proceed with its review into the causes of the failure of HBOS.(Source: FSA Fines and Bans Former HBOS Executive)