13 Apr 2010

Investors 'misled' by Lombard Finance directors

10:11 pm on 13 April 2010

Former Cabinet ministers Sir Douglas Graham and Bill Jeffries are among four directors of Lombard Finance who have been charged by the Securities Commission with misleading investors.

Lombard Finance went into receivership on 10 April 2008, owing approximately $127 million to 4,400 investors.

The Securities Commission on Tuesday confirmed that it has laid civil charges against directors Michael Reeves, Lawrence Bryant, former chairman Sir Douglas Graham and Mr Jeffries.

Securities Commission chairman Jane Diplock says Lombard Finance documents and advertisements misled investors by misrepresenting the investment risks and the company's overall financial position.

Ms Diplock says the commission alleges that the directors made false statements in the registered prospectus in September 2007 and other statements.

Sir Douglas says he and the other directors do not accept the allegations and will defend all charges.

He says the commission never raised any concerns with him before the prospectus was filed.