A legal expert is expecting boardrooms around the country will closely examine a court decision which explores the responsibilities of company directors.
On Friday, the High Court at Auckland found three former directors of failed company Nathans Finance guilty of misleading investors.
Nathans went into receivership in August 2007 owing $174 million to about 7000 investors.
Donald Young, Kenneth Moses and Mervyn Doolan were each convicted of five breaches of the Securities Act for untrue statements made in a series of company statements and advertisements in 2006 and 2007.
Financial Markets Authority chief executive Sean Hughes says the judgement sets a clear standard for directors.
Chapman Tripp partner Roger Wallis says the judgement is the first in a series of important decisions addressing the conduct of finance company directors, and is consistent with the direction courts are going in other countries.
However he doesn't think it has cleared up director's personal responsibilities, and believes a number of the recent Australian cases will be appealed.
Mr Wallis says the Nathan's case was judged on its own facts, and it doesn't necessarily mean other finance company directors will be dealt the same fate.
"I'm sure as a result of this decision directors will look closely at what the judge has said and perhaps change some of their practices, but it's by no means the last word on the matter."
The Nathans' directors will be sentenced in September.
