One of the saddest sights on television lately has been that of Sir Douglas Graham in the dock of the High Court. He was caught in a nightmare. He looked as guilty as only an honest man can be.
He and the other convicted directors of Lombard Finance had failed to ensure that the company's last prospectus gave investors an account of its true position late in 2007 when finance companies were falling over.
The offence is one of "strict liability" under the Securities Act. That means it doesn't matter whether the company's directors realised its material was misleading, let alone intended it to be. If a judge decides it was misleading they have to be convicted.
Quite right too, as Sir Douglas himself would say. As Minister of Justice in the 1990s he was responsible for some of today's company law, including financial reporting requirements.
We remember Doug Graham from those years for the work he did on Treaty settlements.
He and Prime Minister Jim Bolger have not had as much credit as they deserve for picking up a task that had been accepted but hardly started by the previous Labour government.
Back then, National could easily have turned its back on the Treaty revival, most people wouldn't have cared and most of the National caucus were probably inclined to do so. But Graham and Bolger, high-minded Tory and Irish Whig, quietly got on with it.
Under National the pace of settlements quickened. They were able to make much more progress, it turned out, than the Labour government that followed them.
Graham left Parliament in 1999 with a deserved knighthood. His conspicuous high standards in public life made him a natural for directorships. His name undoubtedly was the reason that many put their savings in Lombard Finance. That, and finance company interest rates of course.
I've never been able to join the chorus of outrage on behalf of small investors who were caught in the collapses of 2007-2008. I always wonder how much they made while times were good.
Even the smallest of investors (me) knows two simple truths: high returns mean high risk, and if all your eggs are in one basket you are more likely to lose them. Anyone who put his life savings in Lombard was gambling big and I bet he knew it.
Now, one such punter is leading a call that seems to be gathering credibility for Graham to be stripped of his knighthood. The way Sir Douglas looked in the dock, he might hand it in but I hope he does not - for our sake. We didn't used to be a vindictive society and we won't become one if leaders resist demands such as this. He must keep the title. The Prime Minister should have had said as much as soon as he was asked the question.
The difficulty of dealing with vengeance is that in resisting it you will be accused of exonerating culpable conduct, but John Key could have simply replied: "Doug Graham was knighted for services to this country that deserved to be honoured and still do. I have no intention of revoking his knighthood." Instead, he said he would do nothing until after the sentencing at the end of March, as though this was an issue for the judge.
By leaving the possibility dangling he has given oxygen to a mob.
One politician has had the decency to say publicly what needs to be said. The newly retired Jim Anderton told television that while Graham and fellow former MP and Lombard director Bill Jeffries had failed in their duty, "I doubt that either of them has a dishonest bone in his body".
The court didn't rule on their honesty or intentions because it didn't have to. There is a passage in the judgment that tells me everything about Sir Doug's demise.
Lombard's last prospectus, issued in December 2007, 3 months before the company was put in receivership, failed to disclose, among other things, the dire state of its loan book.
Sir Douglas didn't think the position was dire. Though loan repayments from property investments had been substantially lower than loan managers had projected for four straight months, he did not consider four months long enough to rely on.
Nor did he think the prospectus needed to mention this. Investors expected directors to make commercial judgments, he argued, and details such as the reliability of loan managers' repayment projections ought to be left to directors.
The judge didn't agree. The laws of disclosure, he reasoned, were to enable investors to make decisions for themselves.
Optimism and paternalism were Sir Douglas' downfall, the same qualities that once served the country well. Events have discredited him as a director and will stain his reputation forever. Isn't that enough?