Special Alert : Lloyds appoints independent monitor to look at HBOS fraud
An independent reviewer has been brought in to assess whether victims of the HBOS Reading fraud should be entitled to compensation.
Lloyd’s Banking Group, the owner of HBOS, has enlisted the help of Professor Russel Griggs to run the review after recommendations made by the UK’s Financial Conduct Authority (FCA).
Griggs has worked on a number of previous reviews of the banking sector, including the new process for firms to appeal against being refused credit and the lending code for banks lending to small businesses. He was appointed after questions were raised over the speed at which Lloyds was contacting victims of a fraudulent scheme run by HBOS Reading executive Lynden Scourfield and small business turnaround consultant David Mills, who conspired to seize control of businesses, pushing them into liquidation and seizing millions in illicit profits.
Victims of the scam raised the alarm on numerous occasions to Lloyds, the FSA and the Serious Fraud Office in 2007, but no action was taken until 2010. Questions are still being asked as to whether the fraud was known about higher up in the bank.
Anthony Stansfield, police and crime commission for Thames Valley said “That a fraud of this size could have taken place either displays complicity or incompetence, a lack of corporate governance, complacency and an absence of proper safeguards on the part of the bank.”