The watchdog is investigating allegations David Jones was aware of a deal struck between executives to hide almost 2,000 problem loans from investors. The FSA confirmed he is the subject of an investigation.
Jones was the last surviving member of the board of the bank before it was bailed out by the government at the height of the financial crisis.
Last week former deputy chief executive David Baker was fined £504,000 and banned from “performing any function in relation to any regulated activity”. Former managing credit director Richard Barclay was also fined £140,000 for misreporting mortgage arrears.