Banned ex-NRock finance chief says FSA penalty ‘unfair’

David Jones, the former Northern Rock chief financial officer (CFO) banned by the FSA for misreporting mortgage arrears, today described his punishment as “unfair and disproportionate”.

Jones, also fined £320,000 for allowing false figures to appear in the lender's 2006 accounts, says the FSA disregarded a number of issues, including that he ensured pending possessions and future provisioning levels were fully accounted for.

He says he fully co-operated with the FSA during its investigation and declares he was satisfied stakeholders received sufficient information on credit quality to assess future provisioning levels on the residential loan book.

"I accept I did not ensure information on residential arrears prepared and presented by others was corrected to include certain accounts known as "pending possession cases", Jones said in a statement. "But I consider the FSA's conclusions and imposed penalty unfair and disproportionate.

"I will now put this matter behind me and move on. I intend to pursue opportunities either in an advisory or full time basis."

The FSA says Jones's misconduct began in January 2007 when he agreed, along with former Northern Rock deputy CEO David Baker, to allow false mortgage arrears figures to appear in explanatory text published with the 2006 annual accounts.

It says reporting correct figures would have either increased arrears by over 50% or possessions figures by approximately 300%.

According to the FSA, for nearly a year, Jones was responsible for the continued misreporting of arrears and possessions figures on a monthly basis to Northern Rock's assets & liabilities committee (ALCO) and, on a quarterly basis, to the Council of Mortgage Lenders (CML).

Jones was head of investor relations at the time the FSA says the misconduct began but, by February 2007, had been promoted to CFO.

After the lender was taken into public ownership in February 2008, he resigned as a director but was appointed acting CFO and, later, CFO. He left the company in April this year.