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Former Northern Rock deputy chief executive fined £500,000

David Baker, the former Deputy Chief Executive of Northern Rock, has today been fined £504,000 after admitting that he omitted data regarding 2,000 customers who fell behind on their mortgage payments. The vital data, which showed Northern Rock customers behind on their mortgage payments, was effectively incomplete and resulted in misleading statements being made to the UK financial markets and to the Financial Services Authority.

The data omission occurred just months before the bank collapsed in what was one of the largest and most controversial financial collapses in the UK for some time. It is unclear how the data was omitted from the information sent to the FSA although the fact that Mr Baker admitted misconduct at a very early stage meant that his original fine, which would have been £720,000, was reduced.

Months after the collapse of Northern Rock we are starting to see the problems which the FSA was experiencing and the inner goings-on in the UK banking sector. Data passed to the FSA forms a vital base from which the strength of any financial institution can be gleaned and relevant action taken to assist where required. Whether data regarding the missing 2,000 clients would have potentially saved Northern Rock is debatable because many believe it was the business model which was at fault.

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