A former owner of Norton Motorcycles, in Castle Donington, has received an eight-month prison sentence, suspended for two years, after pleading guilty to illegal pension investments.
Stuart Garner, 53, appeared before Derby Crown Court today (Thursday, March 31), for sentencing and received three 12-month sentences, reduced to eight months, to be served concurrently.
These were then suspended for two years. He was also ordered to pay £20,716.69 in costs – despite being declared bankrupt on May 26, 2021 – and disqualified from being a director for three years.
Last month, Mr Garner pleaded guilty to three charges of breaching ERI rules, by investing most of the money of each scheme into his business, Norton Motorcycle Holdings Ltd.
Derby Crown Court heard how the offences related to three defined contribution schemes: Dominator 2012, Commando 2012 and Donington MC. The investments, made between 2012 and 2013, were made in return for preference shares. These shares were issued by Norton Motorcycle Holdings Ltd for which Mr Garner was both the director and majority shareholder.
In her ruling, Her Honour Judge Nirmal Shant, told Mr Garner that while she had given him 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, as well as damaging their confidence in pension saving.
She added that Mr Garner’s victims had reported problems sleeping, relationship difficulties and some now faced the prospect of having to work longer than they had expected because of his crimes.
Judge Shant said: “This is not just financial harm. I have read statement after statement on the damage you have done to the people involved.”
Nicola Parish, Executive Director of Frontline Regulation at TPR, said: “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.”
The three pension schemes were left with a shortfall of approximately £10 million.
The Pensions Ombudsman has already ordered Mr Garner to repay the amount lost on investment in preference shares, less money already recovered, plus interest.
The independent trustee firm appointed by TPR to the three schemes pursued Mr Garner for this amount, which resulted in his personal bankruptcy.