The banking crisis has taken the scalp of a high-profile City of London regulator. Sir James Crosby resigned as deputy chairman of the Financial Services Authority after a whistleblower claimed he ignored warnings about poor risk management and internal control in his previous job, as chief executive of HBOS, the state-rescued U.K bank.

Paul Moore, the bank’s former Head of Group Regulatory Risk, told a parliamentary committee investigating the banking crisis that he had warned Crosby and other board members about problems brewing in the bank, but was ignored. Crosby—personally—then sacked him, he claims.

In his written evidence to the House of Commons Treasury Select Committee, Moore sets out in detail his concern that HBOS’s retail division was dominated by a sales culture and was growing faster than its internal controls could manage. He also details the barriers he claims to have hit when he tried to warn the audit committee and board. Part of Moore’s job was to provide oversight of executive management’s compliance with FSA regulations.

In a resignation statement issued the day after Moore gave his evidence, Crosby rejected his claims and said they had been “independently and extensively investigated” and the findings shared with the FSA. “That investigation concluded that Mr. Moore’s allegations had no merit,” he said.

For its part the FSA said it would write to Alistair Darling, the UK Chancellor, setting out the details of the investigation report, which was written by KPMG. The accountants had investigated “specific allegations” made by Moore in December 2004 and concluded that changes made by HBOS “were appropriate,” it said.

Moore lost his job at HBOS in 2005. The bank says he was made redundant as part of a restructuring, but Moore says he was unfairly dismissed. He started legal action, which the bank settled out of court. Moore says he received substantial damages and had to sign a gagging order, which he has now decided to break “in the public interest.”

The government forced HBOS into a merger with its rival Lloyds last year after it nearly collapsed. Crosby left the bank in 2006.