William Frederick Harmer, of Mt Claremont, has been sentenced to two years jail after being found guilty in the Perth District Court of making materially misleading statements in a prospectus.
Mr Harmer must serve a minimum 12 months and, upon release, enter into a recognisance of $500 to be of good behaviour for 12 months.
The charges followed an investigation by the Australian Securities and Investments Commission.
Mr Harmer was a director, senior executive, finance broker and an authorised representative of failed finance broking firm Clifton Partners Finance, which later became known as Knightsbridge Finance.
He issued a prospectus between February 1 and March 3 2000 that sought to raise money to enable Clifton Partners to finalise a total loan facility to Onslow Trading Facility of $2.5 million.
At the time Onslow Trading was building the Blackrock Caravan Park in South Hedland.
ASIC alleged the prospectus contained two statements that were materially misleading including:
At January 31 2000 $2.2 million had been raised and a further $320,000 was proposed to be raised under the prospectus that would enable the borrowers to complete the project; and work was nearing completion and the caravan park should be open by the end of February 2000.
Contrary to those statements, construction of the caravan park was not nearing the final stages and there was also evidence that about $1.6 million was required at the time Mr Harmer circulated the prospectus to clients of Clifton Partners.