A whistleblower who wrote a report criticising Lloyds Bank’s handling of a scandal at HBOS has rebuked the FCA for not investigating, the Financial Times reports.
Former Lloyds staffer Sally Masterton wrote to FCA chief executive Andrew Bailey last year, asking him to look into the conduct of Lloyds senior managers towards her.
In 2014, Masterton used knowledge from working in the bank’s high-risk division and claimed that some of HBOS’ executives from its Reading branch were concealing fraud.
This was prior to HBOS becoming a subsidiary of Lloyds following the Global Financial Crisis.
Masterton contacted Bailey last June to say Lloyds had written to the FCA about her in a way “cynically intending to undermine my credibility and minimise the impact of her report.”
She deemed this inconsistent with the FCA’s requirements of “integrity” and “openness with the regulator”.
The FT says Bailey encouraged Lloyds to settle with Masterton financially, but did not consider criticisms she made about the conduct of the bank and its senior managers as serious.
Lloyds compensated Masterton and apologised for the treatment she received last November.
In a letter to MP Kevin Hollinrake, Masterton now says: “The FCA is comprehending or fulfilling its duties, particularly in relation to its legal and regulatory obligations to review the fitness and propriety of senior management under the [regulator’s] Senior Manager and Certification Regime.”
Hollinrake has in turn written to chancellor Philip Hammond asking him to intervene and pursaude the FCA to consider an investigate of Masterton’s complaints.
Hollinrake says: “Anyone under consideration for the role of Bank of England governor must be able to demonstrate a willingness to tackle wrongdoing in the banking sector without fear or favour.”
The FCA said in a statement it had “repeatedly emphasised the need for Lloyds to ensure that Sally Masterton was treated appropriately and Bailey did intervene personally to make sure that happened”.