The Crown has asked for home detention and community work for directors of Lombard Finance.
The company collapsed in 2008, owing investors more than $127 million.
In 2012, former justice ministers Sir Douglas Graham and Bill Jeffries, along with Lawrence Bryant and Michael Reeves, were found guilty of making false statements in company prospectuses.
They were originally sentenced to community work and reparation payments, which the Crown says are inadequate.
At the Court of Appeal in Wellington on Thursday, the Crown said an appropriate sentence for the men would be 18 months' home detention.
It also called for community work of between 100 and 200 hours.
But the defence lawyers want the charges from last year thrown out and argue the directors were given the best estimates of Lombard Finance's liquidity from management, and cashflow projections showed expected loan repayments.
Justices Randerson, Wild and French will release their judgement in writing.
Justice Randerson asked the parties on Thursday what outcome they would like if an appeal was granted.
Crown prosecutor Colin Carruthers, QC, said he would like the Solicitor-General to decide.
Defence lawyer Jim Farmer, QC, said depending on the judges' decision, he would argue for a retrial.
