Four directors of failed finance company Lombard Finance & Investments, including two former cabinet ministers, are now facing potential five year jail terms with the Securities Commission laying criminal charges, on top of the civil ones announced on Tuesday. (Updated with details on civil charges). The four charged are former cabinet ministers Sir Douglas Graham and William Jeffries plus CEO Michael Reeves and director Lawrence Bryant. The commission said the charges stemmed from the same allegations as the civil proceedings announced earlier this week alleging the company’s prospectus documents and advertisements misled investors. Under section 58 of the Securities Act, the criminal charges carry a maximum penalty of five years imprisonment or fines of up to $300,000. They were laid in the District Court at Wellington yesterday. Under the civil charges, the four face fines of up to NZ$500,000 each. Both sets of charges follow investigations in the wake of Lombard's April 2008 receivership, which left 4,400 investors about NZ$127 million out of pocket. On Tuesday Sir Douglas said the directors didn’t accept the allegations and would defend themselves against the commission’s charges.
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