Published 16 April 2010
The Securities Commission confirmed yesterday it had added criminal charges to the civil proceedings it’s filed against Lombard Finance & Investments Ltd directors Sir Douglas Graham, Michael Reeves, Bill Jeffries & Laurie Bryant.
The criminal charges were laid under section 58 of the Securities Act and carry a maximum penalty of 5 years’ jail or fines of up to $300,000. They were laid in the Wellington District Court on Wednesday.
The commission said the company’s receivers at PricewaterhouseCoopers had helped with the investigation.
Commission chairman Jane Diplock said after the civil proceedings were filed: “These proceedings follow extensive investigations by the commission since Lombard Finance & Investments went into receivership on 10 April 2008 owing $127 million to 4400 investors. According to the receivers, it is likely that secured debentureholders will receive less than 30% of their investment back. Unsecured creditors are likely to receive no return.
"The commission alleges that Lombard Finance & Investments’ offer documents & advertisements misled investors by misrepresenting the investment risks, especially in relation to liquidity, the quality of the loan book, adherence to credit policies and the company’s overall financial position.”
14 March 2010: Lombard shareholders approve reverse takeover
23 February 2010: Reverse takeover of Lombard to proceed
2 June 2008: Lombard acting chairman blames receivership for loss
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Attribution: Commission release, story written by Bob Dey for the Bob Dey Property Report.