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HBOS whistleblower 'was sacked' HBOS whistleblower probe demanded
(10 minutes later)
A former HBOS executive has told the BBC he was sacked for warning his bosses they were taking too many risks with the mortgage bank's money. The Tories want an urgent inquiry into claims that one of Gordon Brown's key advisers sacked a bank whistleblower who warned about excessive risk taking.
Paul Moore said he raised concerns about "inappropriate behaviour" with the bank's board in 2005 - three years before its near collapse. Sir James Crosby allegedly sacked HBOS executive Paul Moore in 2005 after he warned the bank's board about its potentially dangerous "sales culture".
He says he was sacked by the bank's then chief executive, Sir James Crosby, now a key adviser to Gordon Brown. Sir James was HBOS' chief executive at the time and is now the deputy head of the Financial Services Authority.
The Tories are calling for an "urgent investigation" into the claims. The Tories say the claims could call Mr Brown's judgement into question.
Mr Moore, who was head of group regulatory risk at HBOS, told BBC Two's Newsnight, in an interview to be broadcast later, that there was evidence of "negligence", questions of "breach of principles" and even "recklessness" at the bank. Mr Moore, who was head of group regulatory risk at HBOS, has told the BBC there was evidence of "negligence", questions of "breach of principles" and even "recklessness" at the bank.
'Gagging order''Gagging order'
He said: "I realised the bank was moving too fast and I raised those challenges very strongly at Board level. I also raised issues of cultural indisposition to challenge and inappropriate behaviours, and ultimately I was sacked." In a Newsnight interview, he said: "I realised the bank was moving too fast and I raised those challenges very strongly at board level. I also raised issues of cultural indisposition to challenge and inappropriate behaviours, and ultimately I was sacked."
Earlier, in written evidence to the Treasury Select Committee, Mr Moore said the crisis could have been avoided if there had been adequate systems to hold bank chiefs in check. Earlier, in written evidence to the Treasury select committee, Mr Moore said the crisis which drove HBOS to the brink of collapse could have been avoided if there had been adequate systems to hold bank chiefs in check.
What is at issue here is Gordon Brown's judgement and the people he takes advice from George Osborne, shadow chancellorWhat is at issue here is Gordon Brown's judgement and the people he takes advice from George Osborne, shadow chancellor
"When I was head of group regulatory risk at HBOS, I certainly knew that the bank was going too fast (and told them), had a cultural indisposition to challenge (and told them) and was a serious risk to financial stability (what the FSA call 'maintaining market confidence') and consumer protection (and told them)," he said. He said: "I told the board they ought to slow down but was prevented from having this properly minuted by the chief financial officer.
"I told the board they ought to slow down but was prevented from having this properly minuted by the chief financial officer.
"I told them that their sales culture was significantly out of balance with their systems and controls.""I told them that their sales culture was significantly out of balance with their systems and controls."
Mr Moore said that, after suing for unfair dismissal, he received "substantial damages" but was subjected to a "gagging order" preventing him from speaking out.Mr Moore said that, after suing for unfair dismissal, he received "substantial damages" but was subjected to a "gagging order" preventing him from speaking out.
He had decided to talk publicly about the issue now because, he said, "the public interest demands it".He had decided to talk publicly about the issue now because, he said, "the public interest demands it".
The executive who sacked him, Sir James Crosby, is currently deputy chairman of the Financial Services Authority, the chief regulator of the industry and a key adviser to Gordon Brown.
'Emperor's new clothes''Emperor's new clothes'
Mr Moore's account of his warnings and his alleged treatment by Sir James was disclosed in an evidence session of the Treasury committee, at which bankers including former HBOS chief executive Andy Hornby and former chairman Lord Stevenson apologised for bringing their banks to the verge of collapse. Mr Moore's account of his warnings and his alleged treatment by Sir James was disclosed in an evidence session of the Treasury committee, at which figures including former HBOS chief executive Andy Hornby and former chairman Lord Stevenson apologised for bringing their banks to the verge of collapse.
Lord Stevenson said Mr Moore's claims had been rejected after a nine month inquiry by the Financial Services Authority. Lord Stevenson said Mr Moore's claims had been rejected after a nine-month inquiry by the Financial Services Authority.
He also denied Mr Moore's claim that he had been prevented from putting his claims on the record by having them included in the minutes of a board meeting.He also denied Mr Moore's claim that he had been prevented from putting his claims on the record by having them included in the minutes of a board meeting.
Andy Hornby also rejected Mr Moore's claim that he was met with "threatening behaviour" from some executives when he tried to raise concerns. In his written evidence to the committee, Mr Moore said the HBOS story was like the "Emperor's new clothes" with no one prepared to "step out of line" and say what was going wrong. Mr Hornby also rejected Mr Moore's claim that he was met with "threatening behaviour" from some executives when he tried to raise concerns. In his written evidence to the committee, Mr Moore said the HBOS story was like the "Emperor's new clothes" with no one prepared to "step out of line" and say what was going wrong.
Shadow chancellor George Osborne said: "Paul Moore has made very serious allegations about how his warnings about the risks being run at HBOS were dismissed by the then chief executive, James Crosby.Shadow chancellor George Osborne said: "Paul Moore has made very serious allegations about how his warnings about the risks being run at HBOS were dismissed by the then chief executive, James Crosby.
"Given that as chancellor, Gordon Brown appointed Sir James as deputy chairman of the FSA and that as prime minister he relies upon him as a key economic adviser, the Government need urgently to investigate the allegations and discover the truth. "Given that as chancellor, Gordon Brown appointed Sir James as deputy chairman of the FSA and that as prime minister he relies upon him as a key economic adviser, the government need urgently to investigate the allegations and discover the truth.
"What is at issue here is Gordon Brown's judgement and the people he takes advice from.""What is at issue here is Gordon Brown's judgement and the people he takes advice from."