Name William Stern | ||
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William George Stern (born Vilmos György Stern in Budapest, Hungary, 2 July 1935) is a businessman most notable as the owner of the British Stern Group of companies. When it collapsed in 1973, Stern became Britain's biggest bankrupt with debts of £118 million. The uninsured losses sustained by thousands of investors led directly to the creation of Britain's first Policyholders' Protection Act.
During the 1960s, rising economic fortunes in Britain lead to the creation of the first unitised property funds. Initially, only pension funds and charities were permitted to purchase units in these trusts, but these regulations were relaxed under the leadership of Prime Minister Edward Heath who came to power in 1970, after which time the general public could also invest via insurance companies. One such intermediary was Nation Life Insurance, part of the Stern Group.
As a result of the stock market crash and secondary bank crisis of 1973–74, property prices in Britain tumbled dramatically. Investment fund customers attempted to liquidate their rapidly devaluing bonds, but the funds had insufficient cash to meet their redemption obligations, leading to their collapse. Nation Life, and its parent company, were forced into administration, and William Stern was declared bankrupt. The scandal was raised in the British Parliament on several occasions, and a BBC documentary on the subject aired in 1974. Thousands of private investors lost their life savings, since at the time there was no compensation scheme in place to protect them. As a direct consequence of Nation Life's failure, the 1975 Policyholders' Protection Act was introduced, which mandates investors' insurance be paid for by a one percent levy on investment premiums.
After being discharged in 1987, Stern resumed his business activities, until a second commercial empire under his control collapsed in the 1990s with debts of £11 million. He was subsequently banned from serving as a company director for twelve years in April 2000, following the emergence of evidence that he had appropriated £1.5 million from the business despite his prior knowledge that it was on the brink of failure.
Stern is a survivor of the Bergen-Belsen concentration camp during the Second World War.