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July 27, 2010    

FSA fines Rock’s former finance director

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by Kay Murchie

The Financial Services Authority (FSA) has fined David Jones, Northern Rock’s former finance director, for the misreporting of mortgage arrears at the bank.

The Watchdog has fined Mr Jones £320,000 and banned him from performing any function in relation to any regulated activity.

The fine comes after former deputy chief executive, David Baker, and former credit director, Richard Barclay, were fined a total of £650,000 in April by the FSA for failing to ensure accurate financial information.

According to the FSA’s findings, Mr Jones’ misconduct began in mid-January 2007 when he and David Baker agreed to allow false mortgage arrears figures to appear in text accompanying the 2006 annual accounts.

The FSA said if the figures had been reported correctly, Northern Rock’s arrears would have increased by more than 50%, or repossessions figures by about 300%.

Commenting on the fine, Margaret Cole, FSA director of enforcement and financial crime, said: “Jones had a duty to reveal the true position to the public and to important internal committees. He had numerous opportunities to put things right, but failed to do so.

“This is a message to all FSA approved persons, that they must take their individual responsibilities seriously at all times, or suffer the consequences,” she added.

In a statement, Mr Jones said he accepted that he did not “ensure that information on residential arrears prepared and presented by others was corrected to include certain accounts known as ’pending possession cases.”

However, he described the conclusions and fine as “unfair and disproportionate“.

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