Dominion Finance and North South Finance investors will share a $10.24 million payout after receivers, liquidators and the Financial Markets Authority settled claims against the companies' directors.
The FMA, which had initiated action against DFG and NSF directors Terry and Ann Butler, Robert Whale, Richard Bettle, Paul Forsyth and Vance Arkinstall, said as a result of the deal it will drop its proceedings.
"The directors of the collapsed finance companies failed to perform their roles as directors and did not take adequate steps to ensure they were aware of the company's true position," the FMA said today.
The FMA was not immediately able to say how much of the $10 million would go to each set of investors in the sister finance companies. The settlements talks involved Dominion Finance's liquidators, McGrathNicol, and North South Finance's receivers, from KordaMentha.
Dominion Finance went into receivership in 2008 owing $177 million to almost 6000 investors who have got back 13.5c in the dollar to date.
North South Finance went into receivership in 2010 owing $31 million to almost 7000 investors, who have fared better and got back 65 cents in the dollar.
Ann Butler, Whale, Bettle, Forsyth and Arkinstall were all convicted in 2013 for making untrue statements in offer documents and received varying sentences of home detention and community work.
Whale successfully defended separate charges brought by the Serious Fraud Office. His colleague, Dominion Finance chief executive Paul Cropp, was found guilty during that case and was sentenced to two years and seven months in prison.