Stuart Garner, former owner of Norton Motorcycles, has been given a suspended sentence, after pleading guilty to illegally investing pension scheme money in his failing company.
In a sentencing hearing at Derby Crown Court on March 31, Garner was given a sentence of eight months suspended for two years for each of three counts of breaching employer-related investment rules, the Pensions Regulator stated.
He was also disqualified from acting as a company director for three years and ordered to pay TPR’s costs of £20,716.
The Pensions Regulator announced in August 2021 that it would prosecute Garner, who was accused of transferring £14mn of assets from three pension schemes — Donnington 2012, Commando 2012 and Donnington MC, which have 227 members between them — into his Norton business.
The business subsequently failed, leaving members unsure whether they would ever see any of the money owed to them.
Garner appeared before Derby Magistrates’ Court on February 7 charged with illegally investing money from the three schemes of which he was the sole trustee in a company he owned.
He pleaded guilty to three charges of breaching employer-related investment rules by investing more than 5 per cent of assets from each scheme into his business.
According to the watchdog, in her ruling, judge Nirmal Shant told 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 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.
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 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."
Parish added that 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," she added.
A seven-year ordeal
The schemes were established by Garner in his capacity as director of Manorcrest, their principal employer. They were then sold to prospective members as a means of investing in the marquee Norton Motorcycles business.
The schemes’ administration was undertaken by two directors of T12 Administration who were subsequently jailed for pension fraud in a separate case. Garner then appointed LD Administration in their place, only for its director, Margaret Liddell, to admit to the Pensions Ombudsman that she and her staff had no training in, or experience of, administering occupational pension schemes.