(Bloomberg) -- Former Co-Operative Bank Plc Chairman Paul Flowers, who was found guilty of possession of cocaine, crystal meth and ketamine, was banned from the financial-services industry after using his work email to send and receive sexually explicit messages.
Flowers also made nine “inappropriate telephone calls to a premium rate chat line" on his work mobile phone, the U.K.'s Financial Conduct Authority said Tuesday in a statement. The conduct showed a lack of “fitness and propriety" needed to work in the financial services, the regulator said.
“Mr. Flowers failed in his duty to lead by example and to meet the high standards of integrity and probity demanded by the role," said Mark Steward, the FCA's executive director of Enforcement. “These high standards are what the financial services industry and the wider community rightly expect of its senior individuals."
The ban comes almost five years after Flowers left the bank. Even four years ago, Flowers had pleaded guilty to possession of cocaine, crystal meth and ketamine and been fined 525 pounds ($725). At the time, Flowers apologized, saying there had been a death in the family and he had been under pressure in connection with his job.
“Prohibiting Paul Flowers for discussing sex and drugs on his office mobile phone is like disqualifying Al Capone for tax evasion,” Simon Morris, a lawyer at law firm CMS in London, said in an email. “The point is that Flowers was hopelessly unsuited to chair Co-Operative Bank, its board had no business appointing him and the FSA must have been asleep to interview and then approve him." The FSA is the acronym for the FCA's old name: Financial Services Authority.
A Methodist minister who had held a number of roles in religious and charitable organizations, Flowers was dubbed the Crystal Methodist by the U.K. tabloid press, and was stripped of his religious roles in January The FCA said Flowers had accepted that the phone calls were "foolishness." Attempts to contact Flowers were unsuccessful.
Drug Sales
As well as sending and receiving inappropriate messages, Flowers used his work email account to discuss buying, selling and taking drugs, the FCA said. It said Flowers admitted this was a breach of the bank's computer-use policy, but didn't accept that it went against the directors' code of conduct. The FCA disagreed. As well as saying he was going through a difficult time personally and professionally, the FCA said Flowers told investigators that he didn't have a personal email account at the time.
Economic Secretary to the Treasury John Glen on Tuesday also announced an independent review into the Co-Op's supervision for the period from 2008-2013, including its decision to withdraw from a bid to buy 632 bank branches from Lloyds Banking Group Plc. The probe will be led by Mark Zelmer, a former senior official at Canada's central bank and the International Monetary Fund. Nicky Morgan, the head of Parliament's Treasury Committee, said the review is “hugely overdue.”
To contact the reporter on this story: Franz Wild in London at fwild@bloomberg.net.
To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser
©2018 Bloomberg L.P.
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