Proactive Investors - Run By Investors For Investors

FCA bans Co-op Bank's 'Crystal Methodist' ex-boss from financial services industry

Paul Flowers used the bank’s phone and computer systems to access premium-rate chat lines and trade sexually explicit messages, the FCA found
Co-op Bank
Paul Flowers was chairman of the bank from 2010 until 2013

The former chairman of Co-operative Bank (LON:CPBB), Paul Flowers, has been banned from the financial services industry by the City watchdog.

The Financial Conduct Authority found Flowers used the bank’s phone and computer systems to access premium-rate chat lines and trade sexually-explicit messages during his time as chairman from 2010 until 2013.

READ: Co-op Bank lives to fight another day as it agrees £700mln rescue deal

Flowers was forced to step down following allegations he bought and used illegal drugs and claimed inappropriate expenses.

His departure from Co-op Bank came at the same time as the lender was found to have a £1.5bn black hole in its finances, resulting in it having to be rescued by US hedge funds.

The former Methodist minister later pleaded guilty to possessing cocaine, ketamine and crystal meth after secret footage emerged. Following the scandal, he acquired the nickname ‘Crystal Methodist’ and was removed from the list of Methodist Church ministers.

Flowers 'demonstrated a lack of fitness', says FCA

In its ruling on Tuesday, the FCA said 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,” said Mark Steward, the FCA’s executive director of enforcement and market oversight.

The FCA’s investigation revealed he used his work mobile phone number to make “a number of inappropriate calls to a premium-rate chat line”.

He also used his work email account to send and receive “sexually explicit and otherwise inappropriate messages, and to discuss illegal drugs”, the regulator said.

The watchdog said he "demonstrated a lack of fitness and propriety required to work in financial services”. Consumers would lose faith in the industry if he was allowed to continue working in it, the FCA added.

Treasury launches independent review into Co-op

The FCA said it did not investigate Flowers’ role in the near-collapse of the bank, just his use of company technology and drug convictions.

However, the Treasury has kicked off an independent review into supervision of the bank between 2008 and 2013.

Nicky Morgan, the chair of the Treasury select committee, said she had written to the head of the FCA, Andrew Bailey, last week to ask why an investigation into the bank had yet to get off the ground. 

View full CPBB profile View Profile

Co-operative Bank plc Timeline

Related Articles

medical cannabis
October 31 2018
Redfund Capital continues to expand, with the launch of its subsidiary, First Euro Cannabis

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use