Capital One's chief financial officer resigned yesterday in the face of an insider trading probe, dealing a big blow to the credit card company's efforts to regain credibility with investors.

Mr David Willey (42), left the company after being notified that the Securities and Exchange Commission planned to bring civil charges against him, Capital One said in a statement.

Capital One, seventh-biggest US credit card issuer, said the SEC planned to allege that Mr Willey traded its stock "while in possession of material non-public information".

Mr Willey sold 52,075 shares in Capital One worth more than $3 million (€2.77 million) in May 2002.

Two months later, the shares fell 40 per cent when the company disclosed it was increasing reserves by $247 million at the request of regulators because of its large number of risky loans.

Since the July 2002 announcement, Capital One has been fighting to restore its reputation, making the news of Mr Willey's resignation particularly devastating.

Mr Willey had been with the company since 1989.

Capital One shares were down $2.85, or 9.2 per cent, to $28.12 in midday trading in New York. That compares with a 52-week high of $66.50 on April 17, 2002.

"The capital markets have become cautious about the company," said Mr Kenneth Posner, Morgan Stanley analyst.

"The CFO resigning is only going to increase uncertainty."