Northern Rock’s former finance director David Jones has been heavily reprimanded by the Financial Services Authority. The FSA fined Mr. Jones 320,000 pounds and has banned him from performing any function related to any regulated activity. He is the third of Northern Rock executives to be fined and banned by the FSA.
In April, Northern Rock’s Chief Executive David Baker and former Credit Director Ricard Barclay were banned and fined a total of 650,000 pounds by the FSA for failing to ensure accurate financial information.
The FSA found that Mr. Jones agreed to allow false mortgage arrears figures to appear in the footnotes of the 2006 annual accounts. As a result, 2000 pending repossessions were left out. The FSA said that from 2005 Northern Rock staff were pressured to report arrears at one half the rate of rival companies.
If staff had reported Northern Rock’s financial records on arrears correctly the number would have been increased by 50 per cent.
FSA stated that this would have revealed a truer position of Northern Rock’s health and stability to investors and the public.
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.”
Mr. Jones response to the FSA ruling was: “I consider that the FSA’s conclusions and imposed penalty are both unfair and disproportionate.”