Bank of Scotland plc

On 21 June 2019, the FCA has fined Bank of Scotland Plc (BOS). The reason for this action is because the Firm contravened Principle 11 (Relations with regulators) by failing to be open and cooperative in its communications with the Authority in relation to BOS’s suspicions that fraud may have taken place within its London and South East Regional Impaired Assets office headquartered in Reading (IAR) between 3 May 2007 to 16 January 2009. A serious control breakdown was discovered in early 2007 by BOS in IAR. The Director of IAR in the region, Lynden Scourfield, had been sanctioning limits and additional lending facilities beyond the scope of his authority undetected for at least three years. By 3 May 2007, BOS had identified suspicious conduct, including suspicions of fraud. On a number of occasions during the Relevant Period, internal reports within BOS referred to the issues that had been identified as the `Reading fraud’. However, it was not until July 2009, that BOS provided the Authority with full disclosure in relation to its suspicions and the report of the investigation that it had conducted. As a consequence of this action, the FCA has imposed a financial penalty of £45,500,000 (£65,000,000 pre-stage 1 discount) The FCA’s action took effect on 21 June 2019 and a copy of the Final Notice is displayed on the FCA's web site here: https://fca.org.uk/publication/final-notices/bank-of-scotland-2019.pdf