Stuart Garner sentenced today
Stuart Garner, the former owner of Norton Motorcycles was today sentenced to a custodial sentence of eight months, suspended for two years, and disqualified as a Director for three years, at Derby Crown Court after he admitted unlawfully investing money in the business from three pension schemes for which he was the sole trustee.
Mr Garner had at an earlier hearing pleaded guilty to three charges of breaching employer-related investment (ERI) rules by investing more than 5% of assets from each scheme into his business, Norton Motorcycle Holdings Ltd.
This prosecution, brought by the Pensions Regulator, follows our Determination dated 23 June 2020 of a complaint made by 31 scheme members and the Independent Trustee, Dalriada Trustees Ltd.
In that Determination, we held Mr Garner responsible for committing multiple breaches of trust, resulting in the loss of members’ pension funds. Mr Garner asserted that he was acting in good faith in the members’ best interests by providing them with a genuine investment opportunity; despite his actions breaching ERI rules, as now confirmed in court. Mr Garner’s failure to be aware of his duties or seek advice, and the Pensions Ombudsman’s finding that Mr Garner was not acting in good faith, amounted to ‘dishonesty/wilful default’. So, Mr Garner was unable to rely upon the schemes’ exoneration clauses or statutory relief. The Pensions Ombudsman found Mr Garner personally liable for those breaches and also for individual members’ distress and inconvenience.
The Pensions Ombudsman directed Mr Garner to repay the members’ pension funds to the schemes, amounting to some £10 m plus interest, and make distress and inconvenience payments to the members who brought the complaints to us. The Pensions Ombudsman also notified the Pensions Regulator of his findings.
Mr Garner appealed the Determination and this was scheduled for a hearing in June 2021, at which we were granted permission by the Court to participate. However, he subsequently withdrew the appeal and has entered bankruptcy without repaying the schemes in line with our directions. We are currently exploring with other agencies the impact of this development on potential scheme recoveries.
Following our recent high value Determinations in both this case and Henry Davison (around £3 million), we have established a dedicated Pensions Dishonesty Unit to investigate allegations of serious breaches of trust, misappropriation of pension funds and dishonest or fraudulent behaviour by pension scheme trustees.
Anthony Arter, Pensions Ombudsman, said:
“The principal aim of the Pensions Dishonesty Unit is to hold the wrongdoers responsible for the unlawful gains they have made and ensure they repay these monies to the scheme members – many of whom have lost substantial sums and are now struggling to get by without their lifetime savings. While some of the schemes may also be eligible for the Fraud Compensation Fund, with whom we are engaging regularly, any money obtained for the members through our process will come directly from the hands of those responsible, rather than relying on public funds for repayment. This is an important advance for the industry and I am looking forward to overseeing the positive impact it will have.”
These cases are extremely complex and generally require Oral Hearings. Our Determinations can be found in the ‘Previous decisions’ section of our website.