Guilty plea but no prison for former Nathans Finance director

Friday 4th March 2011 4 Comments

Former Nathans Finance director John Hotchin has been sentenced at the High Court to 11 months home detention, 200 hours of community service and payment of reparation of $200,000.

The 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."

Comments from our readers

On 4 March 2011 at 3:56 pm Bob said:

Considering what people like John Hotchin and others have done to their investors and the luxury of their lives I would like to see them in jail. I would like to see them get a taste of confinement with some of the lowlife of our society instead of still having access to good living, bottles of wine etc. Will a $200,000 fine clean him out financially or is it easily covered by money stowed away probably in family trusts.

On 4 March 2011 at 4:34 pm Steve Gardner said:

Unbelievable!! When will the judiciary get the point that people who pinch Gandmothers money need to go to jail, and be required to make reparation !

On 5 March 2011 at 2:30 pm linda skala said:

I am disgusted with our weak legal system. These people live grandly, expensive homes, cars, much travel, etc. while others will suffer for the longterm, let these suffer with jail, plus a big monetary loss

On 6 March 2011 at 11:19 am Wendy said:

The only remorse John Hotchin has is he didn't get away with it,the finanical hardships of his victims are an experience he will never share or begin to appreciate.