Tags: EU | Britain | Northern | Rock

Former Northern Rock Executives Fined, Banned

Tuesday, 13 Apr 2010 08:03 AM


Britain's financial regulator has fined and banned two former executives of mortgage lender Northern Rock — the country's first major casualty of the global credit crunch — for misreporting figures on loan arrears.

The Financial Services Authority said Tuesday it wanted its sanctions against Northern Rock's former deputy chief executive David Baker and former managing credit director Richard Barclay to be a "loud and clear message that we are serious about taking action against senior directors where they step over the line."

The pair are the only senior executives of a British banking institution to be formally penalized for misconduct in the wake of the government's multibillion bailout of the sector in 2008.

The FSA fined Baker 504,000 pounds ($770,000) and barred him from any activity in the banking sector. Barclay was fined 140,000 pounds and prohibited from holding any senior post in the industry.

"Baker and Barclay both failed to meet the standards we require of senior individuals within FSA-regulated firms," said Margaret Cole, the FSA's director of enforcement and financial crime. "The fines we have imposed on them leave no doubt that we will take action against individuals who either fail to act with integrity or who fail to perform their roles to a high standard."

Northern Rock, once the country's fifth biggest lender, was nationalized by the government in February 2008 after suffering the first run on a British bank in more than a century when its funding problems became public in September 2007.

The regulator said that Baker, who held his position at the bank between 2004 and 2008, knew that almost 2,000 loans had been omitted from the mortgage arrears figures in January 2007 but failed to flag that up, instead taking steps to ensure they were not reported.

Baker also misled stakeholders and analysts about the bank's impaired loan book, quoting inaccurate figures. If he had provided the correct figures, arrears would have jumped by 50 percent, the regulator said.

Barclay, who headed up the bank's debt management unit until March this year, failed to ensure the information it reported was accurate despite warning signs at an early stage, the regulator said.

The FSA said that Baker and Barclay both admitted their misconduct at an early stage and cooperated fully with the regulator, leading it to grant a 30 percent discount on the penalty for each.

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Mali's Islamists Withdraw Cease-Fire Pledge

Friday, 04 Jan 2013 13:06 PM

Tens of thousands of Fatah supporters rallied in the Hamas stronghold of Gaza on Friday for the first time since they we . . .

Fmr. CIA Director Hayden: Iran Nuclear Crisis Gets 'Scarier'

Tuesday, 17 Jul 2012 18:11 PM

 . . .

Join Fmr. CIA Director for Special Iran Briefing, Assess the Danger

Friday, 13 Jul 2012 12:27 PM

 . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved