Rodney Adler - Conviction

Conviction

In 1999, Adler was appointed a Member of the Order of Australia for services to the insurance industry and philanthropy, but gave up the award after his criminal conviction.

Adler was sentenced after pleading guilty on 16 February 2005 to four criminal charges:

• two counts of disseminating information on 19 and 20 June 2000 respectively, knowing it was false in a material particular and which was likely to induce the purchase by other persons of shares in HIH contrary to Corporations Act 2001 (Cth) .html s 999 ;
• one count of obtaining money by false or misleading statements, contrary to Crimes Act 1900 (NSW) .html s 178BB ; and
• one count of being intentionally dishonest and failing to discharge his duties as a director of HIH in good faith and in the best interests of that company contrary to Corporations Act 2001 (Cth) s 184(1)(b).

In sentencing Adler, Justice Dunford said:

The offences are serious and display an appalling lack of commercial morality…Directors are not appointed to advance their own interests but to manage the company for the benefit of its shareholders to whom they owe fiduciary duties…They were not stupid errors of judgement but deliberate lies, criminal and in breach of his fiduciary duties to HIH as a director.

Adler was also disqualified from acting as a director of any company for 20 years; ordered to pay compensation jointly with Adler Corporation Pty Limited and Mr Ray Williams of approximately A$7 million; and ordered to pay a pecuniary penalty of A$450,000. Adler Corporation Pty Limited was also ordered to pay a pecuniary penalty of A$450,000.

Following his conviction, Adler was taken to the maximum security Metropolitan Remand and Reception Centre and following initial classification, was placed in Long Bay Correctional Centre, before being transferred to the minimum security Kirkconnell Correctional Centre in late April 2005. However, less than two months later, Adler was transferred to the higher security Bathurst Correctional Centre after allegedly secretly restarting his business career from within the Kirkconnell facility. On 13 October 2007, Adler was released from the St Heliers Correctional Centre in the Upper Hunter Valley on parole, after serving two and a half years of his sentence, spending time in eight different correctional facilities. Adler was reunited with his wife, Lyndi, and their four children at their home in the eastern Sydney suburb of Vaucluse. Adler described the prison system as "Darwinian, degrading, outdated, boring and pointless" in an article written for The Bulletin magazine in December 2007.