Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Law change undermines deterrence of Lombard sentence: lawyer

Law change undermines deterrence of Lombard sentence, lawyer says

By Paul McBeth

Feb. 11 (BusinessDesk) - Sweeping changes to securities law have undermined the deterrence effect of the custodial sentences handed out to former directors of Lombard Finance & Investments, which should be reduced back to original levels, the Supreme Court heard today.

Former Justice Ministers Doug Graham and Bill Jeffries, former PR man for the Queen Lawrie Bryant and Lombard’s ex-boss Michael Reeves are appealing tougher sentences handed out to them by the Court of Appeal, though weren’t granted leave to overturn their convictions.

Counsel for the directors, Jim Farmer QC, told the country’s top court that the introduction of the Financial Markets Conduct Act last year removed the criminality from their offending, which attracted strict liability, meaning dishonest or criminal intent didn’t have to be proved.

“The question of deterrence and denunciation in relation to this offence simply can’t be something that can properly be said to have any great weight because the law has changed,” Farmer said. “Nobody is going to be deterred by thought of going to prison if they honestly made a mistake.”

The new regime reserves criminality for the most egregious misconduct, leaving cases similar to Lombard as civil matters.

Farmer said he is seeking to reinstate the penalties handed down in the High Court.

All four avoided jail time when sentenced in 2012, when Justice Robert Dobson said the offending was much less serious than that involving other failed finance companies, such as Bridgecorp. They had been found guilty of making untrue statements in investment documents and advertisements in late 2007 and early 2008 and the Crown had initially sought jail terms.

The Appeal Court imposed custodial sentences after determining the original penalty didn’t reflect the gravity of offending and didn’t give sufficient weight to accountability, denunciation and general deterrence.

Jeffries was sentenced to eight months’ home detention and 250 hours community work and Reeves was sentenced to nine months’ home detention and 250 hours community work, having both initially been sentenced to 400 hours community work.

Graham and Bryant were each sentenced to six months’ home detention and fines of $100,000 apiece. Graham had his sentence of community work reduced to 200 hours from 300 hours.

Colin Carruthers QC, appearing for the Crown, told the court this “is a serious case in the category of carelessness,” and that the decision to omit the information in the Lombard prospectus wasn’t open to the directors.

“That puts it into a significant category,” he said.

The hearing is being heard by Chief Justice Sian Elias, and Justices Terence Arnold, William Young, Susan Glazebrook and Peter Blanchard. It is set down for one day and is proceeding.

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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news