Former Co-op boss Paul Flowers banned from financial services by watchdog
The FCA said that Mr Flowers’ conduct demonstrated a ‘lack of fitness and propriety’ required to work in financial services.
Disgraced former Co-operative Bank boss Paul Flowers has been banned from the financial services industry by the City watchdog.
Mr Flowers was chair of Co-op Bank between 2010 and 2013, overseeing its near collapse after revealing a £1.5 billion black hole in its accounts.
He was forced to step down amid allegations he bought and used illegal drugs, as well as claiming inappropriate expenses.
The Financial Conduct Authority said on Tuesday that Mr Flowers’ conduct demonstrated a “lack of fitness and propriety” required to work in financial services.
Mr Flowers demonstrated an “unwillingness to comply” with its and other legal, regulatory and professional requirements and standards, the FCA said.
Its probe showed that Mr Flowers used his work mobile telephone to make “a number of inappropriate telephone calls to a premium rate chat line”, in breach of Co-op Group and Co-op Bank policies.
In addition, he used his work email account to send and receive “sexually explicit and otherwise inappropriate messages, and to discuss illegal drugs”, the FCA added, despite having been previously warned about his earlier misconduct.
In a damning statement, the watchdog said it believes Mr Flowers’ disregard for the standards he is expected to meet demonstrates a “lack of integrity” and that any future involvement by Mr Flowers in the financial services industry risks “undermining consumer and market confidence”.
Mark Steward, executive director of enforcement and market oversight, said: “Mr Flowers failed in his duty to lead by example and to meet the high standards of integrity and probity demanded by the role.
“These high standards are what the financial services industry and the wider community rightly expect of its senior individuals.
“Where a chair, or other senior individual, fails to discharge these standards the FCA will hold them to account.”
Following the scandal, Mr Flowers was also removed from the list of Methodist Church ministers, stripped of the title reverend and the power to lead services for “seriously impairing the mission, witness or integrity of the Church”.
Separately, the Treasury also announced it has launched a new independent review into supervision of the Co-operative Bank between 2008 and 2013.
It will look at the “actions, policies and approach” of the former City watchdog, the Financial Services Authority, and the current Prudential Regulation Authority.
It will cover a “significant period” for the Co-op Bank, including its aborted bid to buy 632 branches from Lloyds Banking Group in 2013, according to the Treasury.
The review will be led by Mark Zelmer – a former financial regulation heavyweight in Canada, who has also acted as a senior official at the Bank of Canada and International Monetary Fund.
The Government had pledged to carry out the independent review in 2013, but said at the time it would wait until the FCA’s own probe ended so that it did not prejudice the regulator’s investigation.