All four Lombard directors file appeals

A date may be a long way off for the appeal of the four disgraced directors of Lombard Finance, the Court of Appeal has confirmed to NBR Online.

Sir Douglas Graham, Bill Jeffries, Lawrence Bryant and Michael Reeves lodged their appeals separately between yesterday and today, a court official says.

All four are appealing their convictions, but it is not known yet when a hearing will take place.

Grounds for appeal are expected to challenge the High Court finding on the duties, responsibilities and accountability of the directors - what they knew and what they should have known - which formed the core of the successful prosecution.

The appeal against conviction - an assertion Justice Robert Dobson got it all wrong - will effectively be a trial within a trial.

Jeffries confirmed shortly after sentencing that he would be appealing; there was nothing confirmed from the other three at the time. Although the appeals were lodged separately, they will be heard together.

It is not known when the hearing will begin or how long it will take, but unless it is fast-tracked it could be lucky to be heard before Christmas. “At such an early stage, nothing has been set down yet…” a court insider says.

On March 29, the directors of Lombard Finance and Investments escaped prison sentences, but former chief executive Reeves only escaped prison or home detention because of ill health and family obligations.

Justice Dobson said expressions of remorse by former chairman Sir Douglas and fellow director Bryant were mitigating factors in final sentencing.

Jeffries “declined to express remorse”, Justice Dobson said in sentencing.

During sentencing, crown prosecutor Colin Carruthers QC said an appeal by the four men against their sentence would be the “antithesis of remorse”.

Mr Carruthers urged the Wellington High Court to sentence non-executive directors, Sir Douglas, Bryant and Jeffries to 2 ½ years in prison and chief executive Reeves to two years,nine months imprisonment. Defence lawyers said their clients had “suffered enough” injury to their reputations.

Sentences stayed
Sir Douglas and Bryant were sentenced to 300 hours community work and fines of $100,000 apiece. Jeffries and Reeves were sentenced to 400 hours community service.

The sentences are stayed until the outcome of the appeals.

The four were found guilty in February of making statements in a prospectus which lead to 4400 investors losing approximately $127 million after Lombard Finance went into receivership in April 2008.

Several victim impact statements were heard during the eight week trial and sentencing, including evidence of how a young couple lost money they planned to use for fertility treatment when the company collapsed.

“I trusted these people. I hope they have learned from their mistakes,” Tristan Hooker said in a statement to the court..

The demise of Lombard Finance was a one part of phenomenal finance company failures.

$8.5 billion was lost after 65 finance companies went under from May 2006 to December 2011, leaving thousands of investors out of pocket.

A select committee inquiry into why these companies failed told commerce minister Craig Foss the public needed to be educated to “understand financial markets better”, cold comfort for the estimated 200,000 out of pocket investors who lost money.

The Financial Markets Conduct Bill, still at select committee stage, is hoped to “restore consumer confidence” in New Zealand.