On March 31, 2022, the years-long, extremely drawn-out saga of Norton Motorcycles’ alleged pension plundering under ex-CEO Stuart Garner finally reached a conclusion. Unfortunately, it’s not a satisfying one, and even though we’re writing about it on April 1, we can assure you it is, sadly, not a bad joke.
For those unfamiliar, the problems arose when in 2012 and 2013, Stuart Garner was sole trustee over three separate pension funds, into which a number of British pensioners invested some or all of their life savings. Through the three schemes, the funds invested totaled about £11 million (or £14,265,143.35 adjusted for inflation, which converts to about $18,705,311.87 in 2022). In Garner’s role as trustee, he then invested all those funds into Norton Motorcycles, where he was CEO and owner between 2008 and 2020.
When pensioners and their families attempted to withdraw the funds, as they were legally entitled to do, they were unable to do so. A total of 227 pensioners ended up losing extremely serious amounts of money due to Garner’s mismanagement. It’s not at all difficult to understand why they and their families hoped to see justice served. Garner did eventually enter a guilty plea, but ended up receiving an eight-month sentence, suspended for two years. What that effectively means is that, if he commits no further offenses within that two-year timeframe, he will not serve any actual prison time, per the BBC.
Garner’s defense was that, while he mismanaged the funds, he did not know he was breaking the law at the time. Judge Nirmal Shant QC, Honorary Recorder of Derby, issued her ruling along with the following statement:
“You controlled the Norton Motorcycle business and in 2012 the business needed funds and you raised around £11m by establishing three funds which were under your control. You did not know you were breaking the law, however it is plain, in setting up a pension fund worth £11m, that you should have known your basic responsibilities as a trustee.”
"You were obligated to act in a prudent manner according to law. You are an experienced businessman and you must have known there was a conflict of interest. It is quite plain the reason was that the banks were not prepared to lend you the money. The fact that banks were not prepared to lend you the money should have set alarm bells ringing to an experienced businessman,” the judge continued.
"By 2020 £1.5m was paid out to members (but) there's a shortfall of £10m. This is not just financial harm, I have read statement after statement from ordinary people who invested. Many speak of broken relationships and ill health. The harm this caused cannot be understated,” Judge Shant concluded.
Meanwhile, back when Garner pleaded guilty to pensions fund mismanagement in February, 2022, his attorney Peter Caldwell characterized his client’s tale as “a tragic fall from grace,” adding that “He has experienced personal anguish and rather serious mental health crises both last year and at the beginning of this year.”
Back in 2020, the U.K. Pension Ombudsman ordered that Garner must pay the pensioners who lost all their money back. However, Garner went on to declare bankruptcy in 2021, and it’s looking less and less likely that those pensioners will ever see financial justice—never mind justice for the other harms caused.
Sources: Derby Telegraph, BBC