Big fines for Rock pair over arrears data
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The FSA has fined former Northern Rock deputy chief executive David Baker £504,000 and ex-managing credit director Richard Barclay £140,000 for misreporting mortgage arrears figures.
Baker has been prohibited from performing any function in relation to any regulated activity and Barclay has been prohibited from performing any significant influence function at an FSA-regulated firm.
As deputy chief executive, between January 2004 and March 2008, Baker was responsible for internal and external reporting.
Despite becoming aware in January 2007 that there were 1,917 loans omitted from the mortgage arrears figures, Baker’s actions meant this was not reported. His statements misled external stakeholders, including market analysts, quoting inaccurate figures.
If the 1,917 loans had been reported as being in arrears, the figures would have increased by around 50 per cent while if the loans had been reported as in possession, the number would have increased from 662 to 2,579 cases.
As managing credit director, Barclay was directly responsible for providing accurate management information on arrears and possessions.
Both Baker and Barclay co-operated fully and qualified for a 30 per cent discount. Barclay’s fine was reduced on the grounds of hardship. His original fine would have been £300,000.
FSA director of enforcement and financial crime Margaret Cole says: “Both held senior positions of trust within the firm but they provided inaccurate information to the Northern Rock board and to the market.”
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