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BusinessDesk: Crown pushes for custodial sentence in Lombard finance case, defence wants community service

Property
BusinessDesk: Crown pushes for custodial sentence in Lombard finance case, defence wants community service

 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 Davison 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.”

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

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9 Comments

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.”

 

Could those with better legal credentials than I explain in plain English what Judge Dobson means when he refers to a material misjudgement by directors which apparently caused  the loss of  life savings for those affected, given such a large sum for so few investors?  

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I will have a go, but that doesn't mean I agree with it. With most crimes you need to prove the action (Actus Reus) and the intent to undertake that act (Mens Rea). But this particular offence is one of the few (Manslaugher being another) where intent isn't an ingredient for the prosecution to prove. I use the word offence because I am not sure it comes under the crimes act.

So there is no doubt they did it, but the judge has determined it was a misjudgement rather than a deliberate act.

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Dear oh dear it was only 80 odd million and a few hundred fools...I mean it's not like they flogged 4 Chocolate fish from a supermart...30 hours CS and a good telling off.."don't get caught again"

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So these Directors oversaw the loss of $127 million and the judge describes it as simply a misjudgement.  I bet this judge didn't have any money invested in Lombard.  The punishment of white collar crime in NZ is a joke.  It's obvious that none of the Lombard 4 will see the inside of a prison.  However the 4,400 investors in Lombard have had to suffer far more due to the loss of their savings.

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"Misjudgement"....oh like lying is to mizspeak...yeah I get it....."you naughty directors off you go and don't get caught again"....

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When you hire a consultant with expertise in a certain area, you do so expecting that they will not make "material misjudgments" in their area of expertise. 

 

I'd have thought that the professional background, education and past employment/experience credentials of these high profile individuals would mean that there was a unique relationship of 'trust' by investors in the directors' proper and knowledgable conduct of their duties.   A "reasonable person" would therefore have certainly assumed that these individuals would not only understand their legal duty in respect of company law, but would also ensure that all the i's were dotted and the t's crossed in respect of those legal obligations.

 

Although I didn't hear the evidence - I cannot imagine how these intelligent and successful men had no idea that the business was in trouble.  I am sure that they had plenty of understanding that the global financial sector was in for a serious shock and that the financial weapons of mass destruction existed and could only but have a knock on effect everywhere.  Again, all the more reason prudent men (as this lot obviously are) would have double dotted those i's and crossed those t's in such a volatile environment where they were caretakers of other's hard earned savings.

 

 

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@ Kate

Exactly - does the community deserve to be exposed to their further endeavours?

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Breaking Herald story says: The Lombard Finance four have avoided a jail sentence, with the former directors sentenced to community service and ordered to pay reparations in the Wellington High Court today.

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Kate these guys are not and never were experts on anything but lying so dont be

fooled . They got Justice alright  [Just  Us ] thats how it works in this country always has.

By the way do some investigating on Mr Reeves his past then reply.

Baz

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