Finance company director found guilty

| July 27, 2012 | 0 Comments


Carol Anne Braithwaite has been found guilty of misleading
National Finance investors.

The 53-year-old was convicted this morning on one charge of
making untrue statements in a National Finance 2000
prospectus.

The charge carries a maximum penalty of five years in jail or
a fine of $300,000.

Braithwaite was the first director of a failed finance
company to have a case tried by a jury.

The jury of 12 had been deliberating since Wednesday
afternoon and reached a majority rather than a unanimous
verdict this morning.

This means 11 of them all believed Braithwaite was guilty
while one juror believed she was not guilty.

According to prosecutors there were 10 material untruths in
the document, an allegation Braithwaite accepted.

She defended the charge on the basis that she believed the
prospectus was correct when she signed it in 2005.

She needed to prove it was “more likely than not” that she
believed the statements were true and that she had reasonable
grounds to do so.

Her lawyer, Quentin Duff, said Braithwaite had information
kept from her by her defacto husband – National Finance boss
Trevor Allan Ludlow – before she signed the prospectus.

In his closing submissions, Quentin Duff referred to a
contestant in reality show American Idol who genuinely
thought they could sing but was actually terrible.

“The question isn’t ‘can Carol sing?’. The question is, ‘at
the time did she genuinely believe she could sing?’ The
answer to that is 10 times yes,” Duff said.

On the other hand, Crown lawyer John Dixon queried whether
Braithwaite had even read the prospectus properly and had
understood it.

“She wasn’t qualified in the first place, [she had] never
been a director of a company, never seen a prospectus
before,” he said.

The Crown argued Braithwaite “abdicated her responsibilities”
as a director.

National Finance went into receivership in 2006, owing
investors $21 million. Some investors have recovered 49c in
the dollar.

Ludlow is serving a sentence of six years and four months’
after being convicted of Serious Fraud Office and the
Financial Markets Authority charges.

He was found guilty last July of defrauding investors of an
estimated $3.5m.

The Financial Markets Authority (FMA) has welcomed the guilty
verdict.

FMA Head of Enforcement Belinda Moffat said the decision
should act as a reminder for what is reasonably expected of
directors in their governance role and disclosure document
obligations.

“A high level of professionalism amongst directors is
essential for restoring market confidence,” Ms Moffat said.

“Directors need to be aware of their obligations and it is no
excuse to say they did not understand them or relied upon
others.”

 

Filed Under: Credit Card News

Leave a Reply

You must be logged in to post a comment.

Get Adobe Flash player