David Jones, the former finance director at Northern Rock, is the third person to receive a hefty fine from the FSA following its investigations into data manipulation.
Jones was fined £320,000 after it was found that he was a key player in the misreporting of mortgage arrears prior to the collapse of the bank in 2008. He joins David Baker, the former deputy chief executive who has already been fined £504,000 and the former managing credit director, Richard Barclay, who was fined £140,000 for similar offences. Jones has also been banned from being involved in any activities that require authorisation from the FSA.
During the course of the investigation, the FSA found out that before the bank was nationalised, false mortgage arrears and possession figures were reported. This gave a misleading financial picture to the bank’s shareholders and analysts.
At its height, the Northern Rock was the fifth largest mortgage lending institution in the UK, but it became Britain’s first major credit crunch casualty and fears of its collapse caused customers to queue for hours to withdraw their savings.
The FSA has been flexing its muscles against people found guilty of financial reporting irregularities. More than £30 million pounds worth of fines were handed out and five people were jailed last year.
Meanwhile, figures recently released by the European Central Bank suggest that homebuyers are becoming more confident in the housing market. Annual mortgage borrowing growth, including mortgages for contractors, in the eurozone reached 3.4% in June, the highest rate since September 2008. Annual mortgage lending growth in the eurozone peaked at 12% early in 2006 before the collapse of the property markets in such countries as Spain and France.
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