Directors at subprime lender Cattles fined and banned by watchdog

Three former directors of the doorstep lender Cattles and its subsidiary Welcome Financial Services have been fined a total of £600,000 by the Financial Services Authority and banned from working in the finance industry for life.

James Corr, Cattles' finance director, has been fined £400,000, Peter Miller, Welcome's finance director, has been fined £200,000, and John Blake, Welcome's managing director, was fined £100,000. Mr Blake is appealing against the ruling.

The subprime loans outfit Cattles virtually collapsed in 2009 and shareholders saw nearly all their value wiped out from what had been a FTSE 250 company.

The FSA said that the men had been responsible for misleading information in Cattles' annual report and rights issue documents. These stated that loans of customers that had fallen into arrears totalled only £900m of the Welcome loan book. The true number was £1.5bn.

Cattles also announced a pre-tax profit of £165.2m for 2007, but if accounting standards had been correctly applied Cattles would have suffered a pre-tax loss of £96.5m.

Shareholders, including those who paid 128p a share in the rights issue, ended with just 1p a share when the company finally left the stock market. The FSA publicly censured Cattles and Welcome, and said it would have imposed substantial financial penalties on them had it not been for their financial circumstances. It did not say what the fines would have been had the men been wealthier.

Tracey McDermott, the FSA's acting director of enforcement and financial crime, said: "The consequences for shareholders of the misleading statements issued by Cattles and Welcome have been devastating. These directors failed to act with integrity in discharging their responsibilities. They failed in their obligations to shareholders, the wider market and the regulator."

At the time of the rights issue, Cattles' auditors were PricewaterhouseCoopers, according to documents from the time. Lazard was the sole sponsor and Citigroup and HSBC were underwriters.

The FSA said: "It is likely that investors would have regarded this [misleading information] as highly material when subscribing under the rights issue."

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific