The UK Financial Services Authority (FSA) has fined former Northern Rock executive David Baker £504,000 for "misreporting mortgage arrears figures."
Mr Baker, former deputy CEO of the bank, and Richard Barclay, the bank's former managing credit director, have been fined and banned by Britain's financial regulator for misreporting statistics on home loans that were past due.
The two men were fined a total of £644,000, the FSA said.
Mr Baker did not tell analysts nor the board about 1,917 loans that were in arrears, the FSA said. Had he done so, Northern Rock's arrears figures would have increased by 50 per cent.
"They both held senior positions of trust within the firm but they provided inaccurate information to the Northern Rock board and to the market," Margaret Cole, the FSA's enforcement director, said in a statement. "This is a loud and clear message that we are serious about taking action against senior directors where they step over the line."
The two men co-operated with the regulator and so qualified for a 30 per cent reduction of their fines. They could not immediately be reached for comment.
The penalty against the men is the first time the FSA has taken major enforcement action against senior managers of lenders that were damaged as a result of the worst financial crisis since the second World War. Northern Rock, based in Newcastle, England, was the first British victim of the crisis.
The bank was nationalised in February 2008.
Bloomberg