FSA enforcer to join Lloyds TSB

THE powerful City regulator who oversaw the initial investigation into mis-selling of precipice bonds by Lloyds TSB is taking a senior job with the offending bank.

Carol Sergeant, the head of enforcement at the Financial Services Authority, is joining Lloyds as chief risk director.

The gamekeeper-turned-poacher move comes just five weeks after the FSA hit Lloyds with a £1.9m fine and ordered it to pay £98m in compensation to 22,500 customers.

However, Sergeant stood down from the case as soon as headhunters acting for Lloyds approached her in July, the FSA said today. She took no part in the decision on the fine or the compensation order.

She will also respect a purdah period, leaving the FSA next week but not joining Lloyds until late February.

Sergeant, 50, was a candidate to succeed Sir Howard Davies as FSA chief executive but was passed over in July in favour of colleague John Tiner.

She is on a £293,000 salary at the FSA. As a member of the executive committee of half-dozen most senior executives at Lloyds, she could expect to earn base pay of about £400,000 plus bonuses.