Disgraced ex van Eyk Research chief, Mark Thomas, will serve a 15-month home-based ‘prison’ term along with 250 hours of community service following a sentence handed down in the NSW District Court last week.
Thomas plead guilty this May to charges of dishonestly using his position as director of van Eyk NZ subsidiary Blueprint Investment Management “with the intention of directly or indirectly obtaining an advantage for himself”, according to a release from the Australian financial regulator.
The former research company big-wig improperly funnelled a A$5 million loan from Blueprint NZ through related entities in Australia to prop up his stake in van Eyk amid a hostile takeover bid early in 2014.
At the sentencing hearing, Judge Bourke said Thomas “breached his position of trust and responsibility” through a series of “complex and sophisticated moves”.
“Judge Bourke also observed that, although there was no investor loss, Mr Thomas ‘exposed managed funds to risk’,” the Australian Investments and Securities Commission (ASIC) release says.
Under the sentence imposed by Judge Bourke in the Sydney courtroom, Thomas will be sort-of locked away for the 15-month period via an Intensive Correction Order (ICO).
Australian legal firm LY Lawyers describes an ICO as “an order from the sentencing court that a term of imprisonment be served in the community”.
“In other words, technically, it is an imposed jail term, but performed in the community under strict supervision of Corrective Services NSW,”
Thomas will also spend 250 hours in community service during his quasi-incarceration period.
But it could have been worse.
He faced a maximum sentence of five years in a real prison and a top fine of A$340,000.
“Judge Bourke took into consideration Mr Thomas’ guilty plea, the loss of his career in financial services, and that as a result of his conviction he will be banned from managing a corporation for five years,” the ASIC statement says.
Founded in 1990 as a pure fund research house by Stephen van Eyk, the company later diversified into the more lucrative field of offering multi-manager products under the Blueprint brand.
In 2013 van Eyk broke into the NZ market with its purchase of the-then Pyne Gould Corporation (PGC) owned Perpetual Portfolio Management and Perpetual Asset Management.
At the same time, the George Kerr-headed PGC sold down its almost 40 per cent stake in van Eyk to Australian Wealth Investments, the ASX-listed company once headed by Andrew Barnes, who subsequently founded NZ trustee roll-up Perpetual Guardian (beginning with buyout of Perpetual Trust from PGC).
However, in August 2014 the Blueprint responsible entity (Macquarie) froze certain funds in the suite, citing a non-compliant exposure to illiquid assets. The Macquarie move triggered a chain reaction that quickly pushed van Eyk into liquidation as well as a spurring a number of long-running legal actions involving Kerr, Thomas, Barnes and others.
In 2016 the Financial Markets Authority ended a two-year probe into the collapse of the van Eyk NZ group with no charges laid. Australian courts fined Macquarie A$400,000 for breaches of its supervisory duties regarding the Blueprint funds.