Yahoo Finance Lloyds hires retired judge for internal probe into HBOS fraud scandal
Lloyds Banking Group has hired a retired high court judge to lead an internal investigation into what the lender knew about the HBOS Reading scandal that has cost it at least £350m and led to the jailing of six people.
Dame Linda Dobbs has been appointed as an “independent legal expert” tasked with assessing “whether the issues relating to HBOS Reading were investigated and appropriately reported to authorities at the time by Lloyds, following its acquisition of HBOS”.
She has been chosen “for her considerable experience of working on fraud cases and track record of chairing enquiries," Lloyds said.
Dame Linda, who became the UK’s first non-white high court judge, will hand her findings over to the Financial Conduct Authority, which is also investigating what HBOS bosses knew about the scandal. Following her retirement in 2013, she was hired by the BBC to draw up a report into Stuart Hall, the disgraced former broadcaster who was jailed for indecently assaulting girls.
In February, six individuals, including two HBOS employees, were sentenced to a combined 47 years and six months for a scam based in the bank’s Reading branch that saw struggling small businesses referred to a consultancy firm and then asset-stripped, between 2003 and 2007.
It involved bribes ranging from cash to sex parties were and has forced Lloyds, which agreed to rescue HBOS during the 2008 financial crisis, to write-off £250m in fraudulent loans.
The bank earlier this month also estimated that it will pay-out £100m to customers who fell victim to the scandal.
It said today that it expected to making offers of compensation from late next month.
