Bank finance chief quits amid mortgage figures probe

UK: A finance chief under investigation as part of a City watchdog inquiry into mortgage figure manipulation at nationalised lender Northern Rock has left the

business, it emerged today.

The bank said David Jones had quit the asset management side of the company with immediate effect “to focus on an ongoing Financial Services Authority

(FSA) investigation into matters relating to a period before the company entered public ownership”.

It is believed the regulator is investigating Mr Jones in relation to a recent inquiry into misleading mortgage arrears figures at the lender, which last week resulted in a near-record fine for its former deputy chief executive.


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Details of the FSA investigation emerged when former deputy chief executive David Baker was fined �504,000 and banned from working in any regulated activity after the watchdog found that he misled shareholders and analysts by quoting inaccurate data.

The fine is believed to be the highest ever for this type of offence and one of the largest handed to an individual.

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A �140,000 fine was also handed to Northern Rock’s former managing credit director Richard Barclay for failing to ensure the accuracy of the figures.

Newcastle-based Northern Rock collapsed into public ownership in early 2008 after it was forced to seek emergency funding from the Bank of England and

suffered the first run on a UK bank for 150 years.

The bank has now been split into so-called “good” and “bad” banks.

The former contains �10.3 billion of the mortgage book and �19 billion in retail savings and is set to return to the private sector.

The latter is the asset management business, which holds approximately �50 billion of residential mortgages and unsecured loans of �3.9 billion.

This business also holds the Government loan and does not offer any new mortgage lending.

A statement from the company today said Hugh Graham, current head of its treasury operation, has been appointed as its interim chief financial officer,

subject to FSA approval.

“This enables Mr Jones to focus on an ongoing FSA investigation into matters relating to a period before the company entered public ownership,’” it said.

“The company is not subject to any sanction from the FSA as a result of this investigation.”

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