Northern Rock FD banned and fined £320,000

David Jones, the former finance director of Northern Rock, has been banned
from working for a regulated company and fined £320,000 by the Financial
Services Authority for misreporting mortgage arrears at the bank.

The FSA said that Jones misconduct began in mid January 2007 when he agreed
“to allow false mortgage arrears figures to appear in explanatory text published
with the 2006 annual accounts”.

Margaret Cole, the FSA’s director of enforcement, said: “Even though other
senior directors within the firm were involved in the misreporting of arrears
and possessions figures, as a senior director himself and as an FSA authorised
person, 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.”

The FSA said Jones misrepresented the arrears figures for a year to the
bank’s assets and liabilities committee and to the Council of Mortgage Lenders.

Jones issued a statement today voicing his disappointment in the verdict.

He said: “I accept that I did not ensure that information on residential
arrears prepared and presented by others was corrected to includ certain
accounts known as “pending possession cases”.

“However, I consider that the FSA’s conclusions and imposed penalty are both
unfair and disproportionate.”

Jones said stakeholders received sufficient information on credit quality to
assess future provisioning levels and that in the first of 2007 the provisioning
charge at £2m was too low to be material to the financial position of Northern
Rock.

Jones added he intended to put the events behind him and pursue other
opportunities.

Read more:

Northern
rock Fd steps down

No
compensation for Rock shareholders