New Zealand’s Securities Commission has laid charges against the directors of Lombard Finance & Investments, the failed NZ finance firm whose parent shell has since been acquired by Perth-based Australian Consolidated Insurance.

The Securities Commission last week announced it has laid both criminal and civil charges against former directors Sir Douglas Graham, Michael Reeves, William Jeffries and Lawrence Bryant.

The investments regulator alleges the directors misled investors over the risk involved in Lombard products, including making false statements in a registered prospectus.

Lombard Finance & Investments went into receivership in April 2008 owing about $NZ127 million ($97.6 million) to 4400 investors.

Criminal charges laid in the District Court of Wellington carry a maximum penalty of five years’ jail or fines of up to $NZ300,000 ($230,494).

The commission has also applied for declarations of civil liability and civil pecuniary penalties of up to $500,000 ($384,156) of each of the four directors.

The directors have stated they do not accept the allegations and will defend the charges.

Sir Douglas Graham is a former Justice Minister in the National Government elected in 1990 and served 15 years in Parliament from 1984 to 1999.

Other Securities Commission investigations into Lombard Finance & Investments and parent Lombard Group continue.