The former directors of Lombard Finance have won their appeal against custodial sentences after the Supreme Court agreed they were "honest men" who made misjudgements under pressure.
"The Supreme Court has concluded that the appellants' conduct did not warrant sentences of imprisonment and has unanimously allowed the appeal," Chief Justice Sian Elias, and Justices Terence Arnold, William Young, Susan Glazebrook and Peter Blanchard said in their decision.
Former Justice Ministers Doug Graham and Bill Jeffries, former PR man for the Queen Lawrie Bryant and Lombard's ex-boss Michael Reeves had appealed to the Supreme Court over sentences of home detention imposed by the Court of Appeal. They weren't granted leave to appeal the actual convictions.
"On the findings of fact made by (Justice Robert Dobson) the appellants were honest men who took their responsibilities seriously but nonetheless, by reason of misjudgements made in circumstances of pressure, were responsible for the issuing of a prospectus which was untrue as to liquidity," the Supreme Court judges said. "These findings of fact were not disturbed by the Court of Appeal. On this basis, the sentencing purposes of accountability, enunciation and deterrence had limited application."
They said the "considerable losses" suffered by investors were less than those in some other comparable cases.
All four Lombard directors avoided jail time when originally sentenced in 2012 after being found guilty of making untrue statements in investment documents and advertisements in late 2007 and early 2008. But the Crown succeeded in getting the Court of Appeal to beef up the punishment to custodial sentences by adding home detention.
The High Court in 2012 had sentenced Jeffries and Reeves to 400 hours community work. Graham and Bryant were each originally 300 hours community work and agreed to pay $100,000 each to investors.
The 4,400 Lombard Finance investors owed $127 million at the time of the receivership have been repaid 13 cents in the dollar, and are looking at an estimated recovery of between 15 percent and 20 percent.