TPR prosecutes Garner after scheme members lose nearly £11m
Dalriada pursues compensation for 255 members who transferred from other pension schemes
The Pensions Regulator (TPR) has successfully prosecuted Stuart Garner for illegally investing nearly £11 million from pension schemes under his control into his own business.
Garner was the sole trustee of three pension schemes, Donington MC, Dominator 2012 and Commando 2012. He unlawfully transferred nearly all the £11.5 million of member funds into his company, Norton Motorcycles.
The three schemes invested in Norton Motorcycles in return for preference shares. The schemes were marketed to members as an investment in Norton Motorcycles.
Between April 2012 and December 2013, 255 members transferred into the schemes from other pension arrangements. Members were forbidden to withdraw any funds for 24 months from the date of transfer, and they were charged if they withdrew funds for the first five years.
TPR notes that Garner’s failures included the requirement to appoint a fund manager, obtain investment advice, appoint an auditor, and diversify pension scheme investments.
The regulator initially responded to whistle-blower reports by appointing independent trustees to the schemes on an emergency basis. Having done so, TPR prosecuted Garner for breaching employer-related investment rules.
The trustee, Dalriada, is now seeking to secure compensation from the Fraud Compensation Fund for scheme members who have lost their savings.
Garner pleaded guilty to all charges in February 2023 at Derby Magistrates’ Court and was sentenced to eight months for each of the three counts, suspended for two years.
Following prosecution, TPR has prohibited Garner from acting as trustee of any pension scheme. This came into effect in September 2023.
Nicola Parish, TPR’s executive director of frontline regulation said: “Our intervention report details how we and other agencies acted against Stuart Garner, including a successful prosecution for offences relating to serious breaches of pension investment duties.
“By taking money from schemes in his care to invest in his failing business, contrary to his duties as a trustee, Garner showed a lack of integrity, competence and capability. It is right he has now been banned from ever acting as a trustee again.
“Our focus remains on supporting the independent trustee in pursuing compensation for scheme members through the Fraud Compensation Fund.”