Two former directors of financial software firm AIT have received jail sentences totalling five and a half years, after being found guilty in August of market abuse charges.
Carl Rigby, 43, the former chairman and chief executive of AIT, was sentenced Friday at Southwark Crown Court to three and a half years imprisonment and was disqualified from being a company director for six years. Gareth Bailey, 36, the firm's former financial director, received a sentence of two years imprisonment and was disqualified from being a company director for four years.
The landmark case, the first of its kind prosecuted in the UK, centred on an interim statement to the stock exchange in May 2002 in which AIT reported a positive end to the financial year and forecasted profit of £6.7m. But the statement included three new business contracts which did not exist. The bogus contracts had a total value of £4.8m.
In passing sentence on Rigby and Bailey, Judge Elwen, said: "Every member of the public, having savings by direct investment on the stock market or by and through products themselves tied to stock markets, is injured if the integrity of the market is damaged by misleading information of this kind being announced to the market."
Margaret Cole, director of enforcement, at the FSA welcomed the judgement. "Directors can expect to be held personally responsible for the announcements they make to the market, as these convictions have shown," she says. "The sentences further demonstrate that the Courts take a serious view of this type of behaviour. Before issuing a statement, directors must carefully consider their obligations and inform and consult their advisors early in the process."
There will be an asset confiscation hearing on 11 November 2005.