FSA slaps fine on ex-Northern Rock finance chief

LONDON (Reuters) - The former finance director of Northern Rock, the British bank which nearly collapsed during the credit crisis and had to be nationalized, received a hefty fine on Tuesday for mis-reporting mortgage arrears figures.

Britain's Financial Services Authority (FSA) regulator said on Tuesday it had fined former Northern Rock finance director David Jones 320,000 pounds ($494,300). It also banned him from "performing any function in relation to any regulated activity."

Jones is the most high-profile Northern Rock executive to have been fined so far by the FSA. He had already stepped down from the company earlier this year in the wake of the regulatory probe into the mortgage arrears cover-up.

Earlier this year, the FSA fined and banned former deputy Northern Rock chief executive David Baker and former managing credit director Richard Barclay for misreporting mortgage arrears and misleading investors.

Baker was fined 504,000 pounds while Barclay's fine stood at 140,000 pounds.

Northern Rock, the fifth-largest UK mortgage lender at its height, was the first major British casualty of the credit crunch and its near collapse prompted a dramatic run on savings.

The Northern Rock debacle sparked fierce criticism of how Britain regulated its financial sector, with the FSA blamed by many politicians during the credit crisis for being too soft.

The FSA has since flexed its muscles with high-profile cases that saw five people go to jail last year and record fines of more than 30 million pounds handed out but the new British government is pushing ahead with plans to dismantle the body, handing powers to the Bank of England.

($1=.6473 Pound)

(Reporting by Sudip Kar-Gupta; editing by Paul Hoskins)