On December 11, the FCA published a final notice to Lloyds Banking Group in which it was fined a record GBP £28 million. The fine was imposed for “serious failings” in its sales practices, the largest UK regulatory penalty for a retail banking misdemeanor. The FCA was particularly critical of “seriously flawed” sales practices and bonus structures in place between January 2010 and March 2012 that involved sales people being potentially demoted, with a potential cut in salary of up to 50 percent, if they failed to hit targets. Final Notice.
Lloyds Banking Group
Corruption Charges Brought Against Former Employees of HBOS’s High Risk Lending Unit
On January 8, the Crown Prosecution Service issued a press release stating that eight people had been charged in connection with Operation Hornet, an investigation by Thames Valley Police into allegations of fraudulent trading, money laundering and conspiracy to corrupt at HBOS’s high risk lending unit. The allegation is that in return for high value gifts, a turnaround consultancy, Quayside Corporate Services, was appointed to administer £35 million worth of loans made to corporate customers in difficulty. Neither Bank of Scotland nor Lloyds Banking Group is the subject of the investigation.