2 Comments 2 CommentsThe sentence came after Hotchin pleaded guilty to three charges laid by the Securities Commission under Section 58 of the Securities Act 1978.
The charges relate to statements made by Nathan in its registered prospectus and investment statement dated December 13, 2006.
The Commission alleged the statements concerning Nathans' lending to related parties, the quality of its loan book, its loan management practices and its management of liquidity were untrue.
It also alleged the directors made untrue statements in a prospectus extension certificate in March 2007 to the effect that the company's financial position had not materially and adversely changed since its last balance date and had not become false or misleading.
Justice Lang indicated the starting point sentence for these breaches of the securities laws was one of three-to-four years imprisonment, but Hotchin's guilty plea, genuine remorse and offer of reparation (which will lead to his bankruptcy) and his agreement to assist the Crown in matters remaining before the Court entitled him to a reduced sentence.
Securities Commission chairman Jane Diplock said, "The starting point of the sentencing in these cases - a significant term of imprisonment - delivers a clear message to all issuers as to the importance of the securities Act's requirements for full and truthful disclosure and the resulting impact on investors’ confidence in the securities market."
"By setting that point at three/four years for these breaches, the High Court has effectively endorsed the sentencing approach taken by the District Court in relation to Five Star directors Marcus Macdonald and Nicholas Kirk in December 2010."
"In common with regulators around the world, the Commission welcomes an early plea and co-operation in cases of this nature."
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