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FSA fines former Northern Rock executives

Source: Reuters - Thu 15th Apr 2010

The Financial Services Authority has fined and banned two former executives of Northern Rock, the troubled mortgage lender taken into state ownership two years ago, for misreporting mortgage arrears numbers.

The FSA said former deputy chief executive David Baker, who held the post until the bank was nationalised, had been fined 504,000 pounds, while Richard Barclay, a former managing credit director, was fined 140,000.

The FSA said Baker, then responsible for accurate reporting and for the bank's debt management unit, failed to report that 1,917 loans were missing from mortgage arrears figures, a change which would have increased numbers by around 50 percent.

Baker has been banned from performing any function related to any regulated activity, while Barclay has been forbidden from performing any "significant influence" function at any FSA regulated firm, the regulator said.

Northern Rock, in public ownership since early 2008, has since been split into a "good" and "bad" bank and is being readied for sale under a new management team.

The bank said in a statement on Tuesday the FSA's action related to events before the bank was nationalised.

"The company has fully cooperated with the FSA throughout its investigation and the company will not be subject to any sanction from the FSA as a result of this investigation," a spokesman said in a statement.

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