FCA moves to ban former Co-op Bank chairman Paul Flowers
Former Co-op Bank chairman Rev. Paul Flowers has been banned by the Financial Conduct Authority (FCA) from the financial services industry.
Flowers was chairman of the bank at the time of its near-collapse in 2013, when a £1.5bn “black hole” was discovered in its accounts.
He left the bank in disgrace shortly afterwards, amid concerns about drug use. In 2014, he was handed a £400 fine and ordered to pay £125 in costs after pleading guilty to charges of possessing cocaine, methamphetamine and ketamine.
In its ruling, the FCA found Flowers’ conduct demonstrated “a lack of fitness and propriety required to work in financial services”.
It also found Flowers demonstrated an unwillingness to comply not only with the FCA’s requirements and standards but also with other legal, regulatory and professional requirements.
The FCA added it believes Flowers’ disregard for the standards demonstrates a lack of integrity and that any future involvement by him in the financial services industry risks undermining consumer and market confidence.
The FCA also found that while Co-op Bank chairman, 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. It was found, too, that he used his work email account to send and receive sexually explicit and otherwise inappropriate messages, and to discuss illegal drugs, in breach of Co-op Group and Co-op Bank policies despite having been previously warned about his earlier misconduct.
Mark Steward, executive director of enforcement and market oversight said: “The role of chair occupies a unique place of trust and influence. The chair is pivotal in setting expectations of a company’s culture, values and behaviours.
“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.”