Paul Moore, HBOS’s Head of Group Regulatory Risk, said internal reviews in 2004 identified mis-selling and unfair customer sales practices tied to the bank’s aggressive sales culture. He warned the board that sales targets and risk controls were dangerously unbalanced, but HBOS dismissed him on 8 November 2004 and replaced him with a retail sales manager. Moore sued for unfair dismissal, arguing that he had been removed for raising concerns that could have reduced profits; HBOS settled the claim for more than £500,000 in mid-2005.
Moore’s concerns were investigated by KPMG before the financial crisis, and the Financial Services Authority accepted the firm’s conclusion that HBOS had appropriate risk controls. After HBOS required a forced merger and a multibillion-pound Treasury bailout in 2008, Moore submitted evidence to the UK House of Commons Treasury Select Committee on 10 February 2009, despite a settlement non-disclosure agreement. His testimony contributed to political scrutiny of the bank’s management; a parliamentary report criticized Chairman Lord Dennis Stevenson, CEO Andy Hornby, and former CEO James Crosby, who resigned as FSA deputy chairman and later surrendered his knighthood and part of his pension.
