Tuesday, Jul 27, 2010
£320K fine for wrecking company and economy
BBC: Northern Rock finance boss banned for hiding arrears
Bernard Madoff got 150 years. One of the fraudsters who brought down Northern Rock gets fined £320K and a slap on the wrist.
Lets not forget that other banks had to adjust their lending criteria to "compete" with Northern Rock. In fact you could say David Jones at Northern Rock helped wreck the entire economy. For the first time I will defend the FSA / Gordon Brown by saying that if they believed the data being published then they couln't make sound judgements on the economy.
Posted by tenyearstogetmymoneyback @ 11:19 PM (969 views) Add Comment
7 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. clockslinger said...
1. False accounting. Hmmm. Making a declaration you knew to be false in a document used for an accounting purpose. (national passtime on self cert mortgage declarations but still an offence)
(Fraud is even more widely drafted under recent fraud act legislation.)
2. Aiding and abetting is a concept widely used to secure convictions and includes counselling and "procuring" (bringing about) and offence(again, what every mortgage broker I went to was doing on mortgage applications, but still an offence)
I wonder if anyone would like to clarify what the difference is between "allowing false accounting figures to appear" and aiding and abetting false accounting? Or aiding and abetting fraud? Maybe a Rock lawyer could reply. Or maybe a brave soul could jack up a private criminal prosecution ..."pour encourage les autres" amongst the wannabe serfowners.
2. str 2007 said...
I couldn't defend Gordon brown or the FDA because basic common sense should have told them 125 percent mortgages would cause problems. Their heads were in the sand because it suited them. Unforgivable, they were paid to be aware.
3. Exiges said...
If he gets a £320k fine, what fine should Gordon Brown get ?
4. mark wadsworth said...
What str 2007 says.
The BoE brought out a little pamphlet in 1997 on the stability of the banking system etc and at the back was a one-page crash course in banking supervision. The things to look out for were rapid expansion in market share; very generous lending (in terms of low interest rates or high loan to value or loan to income); being funded by large short term loans (whether MBSs, money markets, etc) rather than share capital, retained profits or ordinary deposits and new or unusual 'business models'.
NR ticked all five of those boxes and had been doing so every year since about 2002 or 2003. In other words, even if NR had not incurred a single penny of arrears before 2007, all the alarm bells were ringing for anybody who looked at their accounts, and I am one of the few people who took a few minutes to look at them.
To cut a long story, the BoE, FSA and the government were wilfully negligent via a vis NR. It's not something arcane like Equitable Life's high interest promise hangover from the 1980s where you'd have had to bury a lot deeper to spot it (and which that company's auditors and actuaries should have done).
5. jack c said...
Absurd 125% lending, fruadulent applications followed up with fraudulent reporting by the lender - yet people are still trying to convince me that the market isnt overpriced.
6. a saver said...
Surely there's quite a few people serving prison sentences for fraud on a pretty miniscule scale compared to this?
Don't know how NR, the FSA etc get away with it. Was it Korea where they sentenced their chancellor to death because he fu**ed the economy?
7. tenyearstogetmymoneyback said...
Thinking about it, isn't what David Jones did directly comparable to what Nick Leeson did at Barings ?
Nick Leeson got 6.5 years although that was from a Singapore court.