Humiliation for former Justice Ministers in Lombard judgment
Feb. 24 (BusinessDesk) – Two former Ministers of Justice, Doug Graham and Bill Jeffries, face the prospect of prison terms, fines of up to $300,000, or community sentences after being found guilty on four of five charges relating to their role in the collapse of the Lombard finance group.
Graham, knighted for his contribution to the Treaty of Waitangi settlements process, was reportedly visibly shaken by the verdict, delivered in the High Court in Wellington this morning by Judge Robert Dobson against four Lombard directors: Graham, Jeffries, Lawrie Bryant, and Michael Reeves.
All were released on bail without conditions after an eight-week trial that wrapped up earlier this month and involved some of the highest-profile professional directors to get caught up in the widespread collapses of finance companies as the New Zealand property market went sour and the global financial crisis hit.
The charges were laid by the then Securities Commission, which subsequently became the Financial Markets Authority, and relate to making untrue statements in a 2007 prospectus, investment statement and advertising material.
Lombard went into receivership in April 2008, owing approximately $127 million to about 4,400 investors.
The four charges successfully prosecuted related to registration of a prospectus that omitted to disclose the company’s deteriorating cash position, advertising in December 2007 seeking investors for various types of unsecured notes and debenture stock.
A fifth charge, relating to a DVD, was not upheld.