Former CEO of Co-op Bank banned from professional accounting body

Former chief executive of Co-operative Bank has admitted to misconduct over the near collapse at the lender leading to a six-year ban from his membership of the Institute of Chartered Accountants in England and Wales (ICAEW).

Barry Tootell, who was also chief financial officer of the bank, has already been banned from holding senior roles in the City.

The Financial Reporting Council (FRC), which oversees investigations into misconduct has made the recommendation to the ICAEW, will receive £20,000 from Tootell to help recover costs.

Tootell was finance director and then acting chief executive at the bank for 14 months. He took on the role full-time in September 2012 but was placed on gardening leave in May 2013 when the bank was downgraded to junk status.

The bank had to be bailed out by hedge funds when a £1.5bn hole appeared in its books in 2013.

FRC executive counsel Gareth Rees said: “The period of exclusion imposed in this case sends a clear message to accountants of the high standards of professional conduct expected of them when undertaking important roles within business. Mr Tootell engaged in the FRC’s settlement process by accepting his misconduct, which has led to a considerable saving of time and cost.”

Tootell and Keith Alderson, who was in charge of the bank’s business banking division, were banned by the Bank of England (BoE) in January by its Prudential Regulation Authority (PRA).

The PRA publicly censured the bank for failing to have adequate risk management systems in place in August 2015.

The FRC said the BoE’s conclusions were “conclusive evidence of misconduct”. The bank found that Tootell led to a culture that focused on short-term financial position.

The FRC is also probing KPMG’s audit of the Co-op Bank’s financial statements in a separate investigation in the years leading up to the exposure of the capital shortfall.

Former Chancellor George Osborne launched an independent investigation into this at the height of the bank’s crisis. The Financial Conduct Authority’s investigation into individuals remains ongoing.

Co-op responded saying the FRC’s ruling was related to the way it had operated in the past.

“We have said before, the investigations by the regulators into what went wrong at the bank are very important. They indicate the extent of the previous problems at the bank and emphasise that the turnaround is a lengthy and difficult process,” the bank said.

“The findings relate to previous management and the current management team has, over the last three years, progressed the turnaround, having raised additional capital, achieved considerable de-risking, delivered mobile and digital banking capability and strengthened the bank’s appeal to customers.”