Crown pushes for custodial sentence in Lombard finance case

Thursday 29th March 2012 3 Comments

The Crown is seeking a custodial sentence for the directors of failed lender Lombard Finance and Investments while the defence is arguing that community service or a fine is more appropriate.

Crown prosecutor Colin Carruthers QC told the High Court in Wellington that a starting point of 2 years to 2 ½ years was appropriate for non-executive directors Douglas Graham, Lawrence Bryant and Bill Jeffries.

For former chief executive Michael Reeves, Carruthers said 2 years and 9 months was an appropriate starting point.

Paul Davidson QC, council for Graham and Bryant, told the court a sentence of community service or a pecuniary penalty was appropriate for the directors given the lack of dishonesty in their actions.

Judge Robert Dobson is hearing mitigating factors from council today as he prepares to deliver a sentence after finding them guilty making misleading statements in offer documents a month ago.

At the time of the verdict, Judge Dobson said the directors’ offences were a “material step away from the seriousness required for a custodial sentence” and that the law created “criminal liability for what may be no more than a material misjudgement about the accuracy and adequacy of the description of the state of financial health of the company, as directors authorise it in offer documents.”

Lombard Finance went into receivership in April 2008, owing approximately $127 million to about 4,400 investors.

(BusinessDesk)

BusinessDesk.co.nz

Comments from our readers

On 29 March 2012 at 2:37 pm Steve Gardner said:

It is the direct duty of the directors to know the state of the company, and apply appropriate governance. I cannot believe they did not, which amounts to a huge dereliction causing untold misery to thousands of people. Non custodial sentence?....I don't think so.

On 29 March 2012 at 5:02 pm David King said:

We are always being told Directors have to have increase to keep it in line with overseas directors!. They were totally responsible for the company. They could I wonder how much is in trust accounts. wowo

On 30 March 2012 at 6:51 pm Kate said:

If they do not get a custodial sentence it will downgrade the judicial service in everyone's eyes. We do not need to encourage cynicism about the old boy's network looking after friends.It also seems very rascist as any Maori thief would get jail.They told deliberate lies and caused untold misery and what's more Jefferies had the gall to talk about being philosphically opposed to paying anything back.Well those who lost their security because of those directors advise are philosophically opposed to being poor whilst these parasites live in luxury. The government needs to address this issue.