"Do you accept that a director has an obligation to inquire?" asked Crown lawyer John Dixon.
"I do now," Braithwaite replied.
"Isn't the bottom line that you just bought into Mr Ludlow's shtick? His sales pitch? You didn't do enough, didn't turn an independent mind to your responsibilities as director," Dixon asked during a later exchange.
"I tried to be as diligent as I could be," Braithwaite said.
The accused knew that National Finance was in trouble before it collapsed in May 2006 but was hazy in court yesterday on when exactly she became aware of problems.
Braithwaite was given the option of using the family home to keep National Finance in business, but told the court she had refused.
"My children needed a roof over their head," she said.
"I just got to the stage where I just had enough of Allan Ludlow and I wanted to be out of the business," she said.
Braithwaite told the court that despite her relationship with Ludlow becoming strained, the pair went to Fiji together in 2004 and put a deposit up for four luxury apartments.
Braithwaite said in 2003 she had wanted to leave her position, but was told by Ludlow that he needed her at the company.
Braithwaite told the court that if the pair disagreed Ludlow would get angry and in the past he had taken "it out on the children".
Braithwaite had two children with Ludlow and three from her previous marriage living with her at the time.
Both the Crown and the defence are due to give their closing arguments today and Justice Pamela Andrews is likely to give her summing up on Thursday morning.
National Finance went into receivership in 2006, owing investors $21 million. Some investors have recovered 49c in the dollar.
Ludlow is serving a sentence of six years and four months after being convicted of charges laid by the Serious Fraud Office and the Financial Markets Authority. He was found guilty last July of defrauding investors of an estimated $3.5 million.
Both Ludlow and Braithwaite are banned from being company directors until next April.
National Finance accountant John Gray pleaded guilty to theft and false accounting charges in the Auckland District Court in 2010 and was sentenced to nine months' home detention.
THE CASE
* Carol Braithwaite, 53, is the first director from a failed finance company to have a case heard before a jury.
* She faces one charge of making untrue statements in a company prospectus, which carries a maximum penalty of five years in prison or fines of up to $300,000.
* According to the Crown, there are ten material untruths in the document, an allegation Braithwaite now accepts.
* She is defending the charge on the basis that she believed, at the time, the prospectus was correct.