The Financial Markets Authority is appealing the non-custodial sentences handed out to the directors of failed lender Lombard Finance & Investments.
A spokesman for the market watchdog confirmed the sentences will be appealed, but wouldn't provide more details.
Last month, Doug Graham, Bill Jeffries, Lawrie Bryant and Michael Reeves avoided prison sentences for misleading investors by signing off on offer documents that omitted material information about Lombard's liquidity situation in late 2007, before its collapse in April 2008.
Graham and Bryant each received 300 hours community service and would each pay $100,000 in reparation, while Jeffries and Reeves were sentenced to 400 hours community service. Reeves avoided a custodial sentence due to ill-health and family obligations.
Earlier this month, all four men lodged papers appealing their convictions.
At the time of sentencing, Justice Robert Dobson said the damage to the men's reputation of a criminal conviction couldn't be underestimated, and that although the offending was serious, it was a far cry from other cases involving failed lenders, such as Bridgecorp and Nathans Finance.
Last week, former Bridgecorp boss Rod Petricevic was sentenced to six years' jail for his role in misleading investors and knowingly making false statements in offer documents.
It would have been 7 1/2 years, but Judge Geoffrey Venning reduced it due to Petricevic's otherwise clean criminal record, and that he was physically assaulted and his family threatened.