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Bloomberg
Lloyds Banking Group Plc’s Bank of Scotland unit was fined $58 million by UK’s finance regulator over a scandal at the bank’s Reading division that siphoned millions from failing businesses a decade ago.
The company “failed to alert the regulator and the police about suspicions of fraud at its Reading branch when those suspicions first became apparent,†the Financial Conduct Authority said in an emailed statement. The watchdog also banned four people from working in financial services, including a pair of former HBOS bankers, who were convicted of fraud related to the affair.
The fine ends an episode that cost HBOS financially as well as hurt its reputation. Edinburgh-based HBOS was the subject of one of the most controversial episodes of Britain’s financial crisis. After a state-brokered takeover by the former Lloyds TSB in 2009, the combined entity ultimately required a 20.3 billion-pound taxpayer bailout.
“There is no evidence anyone properly addressed their mind to this matter or its consequences,†Mark Steward, executive director of enforce- ment and market oversight at the FCA, said in a statement.