Former HIH CFO Dominic Fodera has been found guilty on charges stemming from the release of a 1998 prospectus that omitted key information about its underwriter, Société Générale Australia Limited.

After a trial lasting more than four weeks, a jury took a day to find Mr Fodera guilty of issuing the prospectus with a material omission.

Mr Fodera is due to be sentenced in the NSW Supreme Court on May 10 and is under strict bail conditions, including surrendering his passport. He faces a maximum prison term of five years and/or a $22,000 fine.

HIH founder Ray Williams was convicted of a similar charge in December 2004 over the same prospectus.

Mr Fodera – the seventh former HIH executive to be convicted after the group’s 2001 collapse – will also face charges later this year of giving false or misleading information, and failing to act honestly as a director.

The October 1998 prospectus was issued to raise $155 million to purchase FAI Insurance, but it failed to tell investors the risk to Société Générale had effectively been removed by a secret $35 million note allocation.

This transaction involved Société Générale taking a priority allocation of the notes in exchange for HIH depositing $35 million with the insurer, and entering into an arrangement known as a total return swap.

Société Générale’s actions are expected to now come under further scrutiny, with the launch of a $50 million court case following Mr Fodera’s conviction.