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The former boss of HBOS admitted selling off two thirds of his shares just before the lender's collapse triggered a 20billion bail out from taxpayers yesterday.
The revelation came as Sir James Crosby apologised for the first time during a hearing with the Parliamentary Commission on Banking Standards.
In a humiliating two hour grilling Crosby claimed to be 'horrified' by the damage caused to taxpayers, which are sitting on a 7.5billion loss as the share price on Lloyds has slumped.
Sorry: Former HBOS boss Sir James Crosby admitted selling off two thirds of his shares just before the lender's collapse
Lloyds was bailed out in October 2008 after being forced to rescue HBOS.
But Andrew Tyrie, chairman of the commission said: 'You managed to get out before the crash – you sold two thirds of your shares'.
Crosby replied: 'In effect yes – but not knowingly. I was essentially balancing my portfolio of assets.'
Tyrie said: 'You sold two thirds of your holdings at a time when messages were getting increasingly strident about the company you just left...you were busy bailing out of it.'
The former boss of HBOS issued a grovelling apology yesterday – more than four years after the collapse of the stricken lender triggered a 20 billion bailout from British taxpayers.
Sir James Crosby was accused of being responsible for a 'terrible catastrophe' and slammed for failing to give up any of his 572,000 annual pension or millions of pounds in bonuses.
Rescued: The former HBOS headquarters on the Mound in Edinburgh in Scotland
The disgraced banker - who went on to become deputy chairman of the City watchdog - also faced calls to give up his knighthood as he admitted that 'incompetent lending' led to the collapse of HBOS.
Forced to account for his actions in public for the first time, Crosby told the Parliamentary Commission on Banking Standards he was 'horrified' by what happened to colleagues and taxpayers.
Andrew Tyrie, the chair of the banking commission, asked why he had failed to apologise.
Crosby, chief executive of Halifax Bank of Scotland from 2001 to the Summer of 2006, said: 'I'm very sorry about what happened.'
Asked what he was apologising for, he responded: 'I'm apologising for the fact that I played a major part in building a business that failed.'
He added: 'I wasn't there for the last few years but it would be wrong to disassociate myself from what happened… I was horrified and deeply upset by what happened – it was hugely distressing to see what happened to shareholders, colleagues and taxpayers.'
HBOS was forced to the brink after embarking on a reckless lending spree lasting most of the last decade.
It was rescued by Lloyds in September 2008.
But Lloyds had to be bailed out to the tune of 20billion several weeks later after it was crippled by the toxic loans made by HBOS.
Lloyds has had to write off an estimated 26billion in loans to businesses made by HBOS that were never paid back.
Taxpayers are now sitting on a loss of 7.5billion as Lloyds' share price has slumped, while just under 39,000 staff have lost their jobs.
But while former Royal Bank of Scotland boss Fred Goodwin was forced into forfeiting some of his pension and stripped of his knighthood, Crosby has managed to maintain a low profile.
He walked away from HBOS with a 572,000 retirement income, having accumulated more than 8 million in bonuses in his last five years as chief executive.
He was also courted by former prime minister Gordon Brown, recruited as deputy chairman of the FSA in 2007, and went on to collect a string of lucrative board positions.
Tyrie accused him of 'profiting from failure' and asked why he had not volunteered to give up any of his pay and perks.
He said: 'People understand that mistakes can be made. They don't grasp that you have profited from this failure – and have not apologised.'
Crosby also faced calls to give up his knighthood.
Pat McFadden MP asked if Crosby understood the public's anger towards the former bosses at HBOS. He added: 'Is it fair that one knight is stripped of his knighthood and others carry on regardless?'
Crosby said: 'I am in no doubt that my reputation and achievements will ever again be seen in the same light.'
I thought they called that 'INSIDER TRADING' and it was illegal, but I forgot that bankers don't commit crimes they only make mistakes !
- Cut the BS , Dorset, 04/12/2012 06:40
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