British regulator says fines former Northern Rock boss

27th July 2010, Comments 0 comments

The British regulator, the Financial Services Authority, on Tuesday said it had fined a third former boss of state-rescued Northern Rock bank for misreporting mortgage arrears data.

The FSA said it had fined David Jones, former finance director of Northern Rock, 320,000 pounds (383,000 euros, 497,000 dollars).

In April, the FSA fined the bank's former deputy chief executive David Baker 504,000 pounds and Northern Rock's former managing credit director Richard Barclay 140,000 pounds.

"Jones's misconduct started in mid January 2007 when he agreed, along with David Baker, to allow false mortgage arrears figures to appear in explanatory text published with the 2006 annual accounts," the FSA said in a statement on Tuesday.

It added that Jones has been "prohibited him from performing any function in relation to any regulated activity."

Northern Rock was nationalised in early 2008 after it ran into severe funding problems because of the credit crunch triggered by the US subprime housing crisis.

The troubled group was plunged into crisis in mid-September 2007 when it was forced to seek emergency help from the Bank of England. That sparked the first rush on a British bank in living memory, as customers withdrew cash en masse.

To prevent meltdown, the government agreed in December 2007 to guarantee all customer deposits held at Northern Rock.

© 2010 AFP

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