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Former Rock finance boss brands FSA ban and £320,000 fine unfair

Northern Rock’s former finance director says the Financial Services Authority’s decision to fine and ban him from trading is unfair and disproportionate.

The FSA has fined David Jones £320,000 for misreporting arrears figures at the lender. He has also been banned from performing any function in relation to any regulated activity.

In April the FSA fined David Baker, former deputy chief execu-tive of Northern Rock, £504,000 and Richard Barclay, former managing credit director at the bank, £140,000 for misreporting arrears.

Jones’ misconduct started in midJanuary 2007 when he, along with Baker, agreed to allow false mortgage arrears figures to appear in the explanatory text published with the 2006 annual accounts.

Reporting correct figures would have increased the arrears figures by over 50% or the repossession figures by around 300%.

For nearly a year Jones was res-ponsible for the misreporting of arrears and repossession figures on a monthly basis to Northern Rock’s assets and liabilities committee and on a quarterly basis to the Council of Mortgage Lenders.

Jones says he cooperated fully with the FSA during its investi-gation and is disappointed that it disregarded a number of points.

For example, the regulator found that some cases where repossession orders had been made against properties but physical repossession had not taken place were excluded from the arrears and repossession figures.

Jones says he ensured pending repossessions were fully accounted for in financial statements and that there was no impact on future provi-sioning levels.

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

“But I consider that the regulator’s conclusions and the penalty it has imposed on me are unfair and disproportionate.”

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