His crime - and these are criminal convictions with the potential for a jail term - is that he did not take the role seriously enough.
He signed up to a set of promises to investors and then failed to ensure those promises were kept.
It is a staggering fall from grace for Graham, who was knighted for excellent work on Treaty of Waitangi settlements in the 1990s.
In the midst of a hard-nosed bunch of National Party politicians from that era, he stood out as one of the more affable, charismatic and conciliatory.
He is clearly a thinker and an intellectual, so it is hard to see how he let himself get so deeply involved with a company that has let investors down so badly.
In the context of the heady investment atmosphere of the times, Lombard probably looked pretty good when Graham signed up to join the board.
But as it turns out, the times were extraordinary and much of the booming investment environment was a mirage.
All over the world basic business disciplines were relaxed as returns rolled in. When things went bad they went bad very quickly.
None of that is an excuse. Many finance company investors lost all their savings and had their lives ruined.
Many also invested based on the false premise that names like Sir Douglas Graham added security.
There will be calls from investors for Graham to be stripped of his knighthood. It will be a problematic issue for the Government. These high-powered individuals may challenge the view that their mistakes are criminal all the way to the Supreme Court.
But whatever happens, Graham's reputation has been tarnished and it is a terrible waste of talent.
Graham has the experience and skills to be working for the public good alongside peers like Sir Geoffrey Palmer.
His conviction will be a relief for investors. His involvement in the whole affair is a disappointment.
Owners we need
Another decision in the High Court at Wellington is still making waves. Markets sources say the judicial ruling which rejected the Overseas Investment Office's approval of the Crafar farms deal is already having an effect on foreign investor interest in New Zealand.
Potential deals in the corporate space and the property sector have gone on ice as foreign investors shy away from the uncertainty over OIO approval. That this is not good news for investment bankers and real estate brokers but will hardly bring a tear to the anti-foreign ownership crowd.
The trouble is that New Zealand does need outside capital investment.
Okay, if you are a card-carrying socialist you can stick to your guns on the belief the state can own the lot.
But if you accept that private enterprise is a natural owner for most of the businesses we deal with each day, then it is obvious that NZ is not big enough to self-finance a First World standard of service.
The Government needs to act quickly to resolve this issue. Whether we end up with tougher rules on land sales isn't the primary concern - there are other countries with tougher rules.
Of more concern is that we bed down some rules that don't change with every political whim or judicial challenge.
New Zealand's reputation with foreign investors has already been tarnished by the offhand way the last Labour Government treated the Auckland Airport sale process.
Blessed with natural resources, a large middle class and an educated entrepreneurial population, the country still has plenty to endear it to investors. But with most of Europe and the US desperate for investment, the competition for foreign capital is going to be fierce in the next few years.
Prime Minister John Key will be acutely aware of this. Ironically it is former investment banker Sir Michael Fay - who understands how important foreign capital is to the country - who has thrown a spanner in the works.
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