The former owner of Norton Motorcycles, Stuart James Garner, has been given a suspended prison sentence for illegally investing pension schemes’ money into his business.

Garner was handed an eight month sentence, suspended for two years, for each of three counts of breaching employer-related investment (ERI) rules, and was also disqualified from acting as a company director for three years, and ordered to pay TPR’s costs of £20,716.

He previously pled guilty to the three charges after investing most of the money from three pension schemes of which he was sole trustee, Dominator 2012, Commando 2012 and Donington MC, into his business, leaving a shortfall of approximately of £10m.

Under the Occupational Pension Schemes (Investment) Regulations 2005 set out in Regulation 12 (2), subject to certain exceptions, it is a criminal offence to invest more than 5 per cent of the market value of scheme resources in ERIs.

In the ruling, Judge Nirmal Shant, explained that while she had given Garner full credit for his early guilty pleas, his actions had been reckless and caused profound harm to his victims, both financially and to their mental wellbeing, and damaged confidence in pension saving.

She also noted that Garner’s victims have reported problems sleeping, relationship difficulties and some now faced the prospect of having to work longer than they had expected because of his crimes.

“This is not just financial harm,” Judge Shant stated. “I have read statement after statement on the damage you have done to the people involved.”

Garner was also previously ordered to repay all the money invested lost on investment in preference shares, less money already recovered, plus interest, after The Pensions Ombudsman upheld a complaint from affected members.

Dalriada Trustees has since been appointed as trustee to the three schemes, with the firm having pursued Garner for this amount, which resulted in his personal bankruptcy.

Insolvency practitioners for Norton Motorcycles Ltd are now investigating how much money may be passed to the scheme following the eventual liquidation of the Norton companies.

The regulator also confirmed that Dalriada Trustees will continue to investigate the most effective means to secure financial redress for the schemes while the insolvency process continues, including potential claims on the Fraud Compensation Fund.

TPR executive director of frontline regulation, Nicola Parish, added: “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.”

Share Story: