ASIC Chairman David Knott has expressed satisfaction with the result of the NSW Supreme Court action that saw three former HIH directors found guilty of breaching the Corporations Act.

He said the prosecution of Rodney Adler, Ray Williams and Dominic Fodera reinforces the expectation that directors will observe proper standards of conduct, and will not place personal interests ahead those of the company. 

The court found the three breached their duties in relation to the payment of $10 million by an HIH subsidiary (HIH Casualty and General Insurance Ltd) to Pacific Eagle Equities Pty Ltd, of which Rodney Adler was director.

Mr Adler was found guilty under section 180 (duty to exercise care and diligence), section 181 (duty to exercise good faith), section 182 (duty not to improperly use position), and section 183 (duty not to improperly use information); Mr Williams was found to have breached only section 180 and 182 and Mr Fodera, section 180. 

Still to come is a hearing that will decide whether ASIC can claim on banning orders, compensation and penalties against the defendants. This will take place on Thursday, when Justice Santow will hear the defendants submissions.