Stuart James Garner, the former owner and CEO of Norton Motorcycles has been handed an eight months imprisonment, suspended for two years for illegally investing pension schemes’ money into his business.
Garner was also the sole trustee of the three pensions schemes which invested in Norton Motorcycles. Following a prosecution brought by The Pensions Regulator (TPR), Garner was today sentenced for each of three counts of breaching employer-related investment (ERI) rules. He was also disqualified from acting as a company director for three years and ordered to pay TPR’s costs of £20,716.
Garner pled guilty to three counts of violating ERI laws by investing the majority of the money from each scam into his company, Norton Motorcycle Holdings Ltd, last month.
The offences were related to three defined contribution schemes: Dominator 2012, Commando 2012, and Donington MC, according to Derby Crown Court. The investments were made in exchange for preference shares between 2012 and 2013. Garner was the director and majority shareholder of Norton Motorcycle Holdings Ltd, which issued these shares.
While giving him full credit for his early guilty pleas, Her Honour Judge Nirmal Shant warned Garner that his actions had been reckless and caused great pain to his victims – both financially and mentally, as well as destroying their belief in pension saving.
She went on to say that Garner’s victims had reported sleeping problems, relationship issues, and that some were now facing the potential of working longer hours than they had anticipated as a result of his actions.
Judge Shant says: “This is not just financial harm. I have read statement after statement on the damage you have done to the people involved.”
A gap of around £10m was left in the three pension systems. Garner has previously been ordered by the Pensions Ombudsman to return the amount he lost on his preference stock investment, less any money already recovered, plus interest. Garner was sued for this amount by the independent trustee firm assigned by TPR to the three schemes, which led in his personal bankruptcy. TPR also issued a Determination Notice regarding Dalriada’s appointment today.
Following the final collapse of the Norton firms, insolvency practitioners for Norton Motorcycles Ltd are assessing how much money may be handed to the scheme.
While the insolvency process is ongoing, Dalriada continues to look into the most effective ways to obtain financial redress for the schemes, such as filing claims with his bankruptcy trustee on behalf of the schemes as creditors and filing claims with the Fraud Compensation Fund.
TPR continues to back these other organisations in their efforts to obtain financial compensation for Garner’s victims.
TPR executive director of frontline regulation Nicola Parish says: “Despite being an experienced businessman, Stuart Garner illegally took money from three pension schemes in his care to prop up his struggling business.
“As a result of Mr Garner’s criminality, savers, whose interests he was supposed to safeguard as a trustee, have been affected by substantial financial losses to their retirement savings and have been caused significant distress. It is only the right he is punished for this.
“Rules on employer-related investments are vital to protect members’ savings, and as this case proves, we will take action against those who flout them.
“Trustees must have full knowledge and understanding of the restrictions which apply to pension scheme investments. Trustees may face prosecution or regulatory action if they fail to abide by those restrictions.”