Sentencing principles for director misjudgment

By Lysarne Pelling

On 7 May, the Supreme Court of New Zealand allowed appeals brought by four former directors of Lombard Finance & Investments against sentences imposed on them by the Court of Appeal, and restored the sentences originally set by the trial judge. The appellants had been found guilty by the trial judge of four counts brought under the Securities Act 1978 in relation to untrue statements about Lombard’s liquidity contained in a prospectus and advertisements. The trial judge sentenced the appellants to community work. Two appellants were also ordered to pay reparations of $100,000 (£60,000). On appeal, the Court of Appeal held that the offending warranted sentences of imprisonment, which should on this occasion be commuted to home detention.

In granting the directors leave to appeal from the Court of Appeal’s sentence, the Supreme Court referred to the trial judge’s findings of fact (which were not disturbed by the Court of Appeal) that the appellants were of good character, had acted honestly at all times and ‘took their responsibilities seriously but nonetheless, by reason of a misjudgement made in circumstances of pressure, were responsible for issuing a prospectus’ and advertisements that were in some respects untrue…

Click on the link below to read the rest of the Minter Ellison briefing.

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