A number of investors lost their retirement savings when Bridgecorp folded. But Davidson maintained he had not acted dishonestly in issuing Bridgecorp's investment statements and he genuinely believed they were true.
Justice Pamela Andrews accepted there was no intentional wrongdoing when sentencing Davidson yesterday, but said his position required leadership. He should have been more alert to the company's deteriorating financial health and had been "too forgiving of Bridgecorp's inadequacies", she said.
The allegedly misleading investment statements were distributed from December 2006 until July 6, 2007, despite the fact the company had began defaulting on payments from February 7 of that year.
During a depositions hearing last year, a former staff member told a court Bridgecorp employees were told to lie to investors when they called asking where payments were.
A computer glitch was blamed for the delayed payments.
When first examining Bridgecorp's books, receivers found more than $200 million worth of impaired or questionable loans and just $158,000 left in the bank.
Bridgecorp's largest single investment was in the ill-fated Momi tourist resort in Fiji.
According to receivers' reports it had $106.6 million loan exposure to the luxury development - none of which is likely to be returned.
Yesterday, Justice Andrews said Davidson had shown "genuine, sincere and deep remorse" for what had transpired.
She also said he was of recognised good character and "always had the highest reputation" among his colleagues in the legal community.
This, along with his guilty plea, were mitigating factors in his sentencing. He escaped jail and was ordered to serve nine months' home detention in his Parnell home.
Davidson was also ordered to pay $500,000 in reparations, which would be distributed by the court to some Bridgecorp investors.
He will also serve 200 hours of community work.
Although the Securities Act charges carry a maximum penalty of five years' imprisonment or fines of up to $300,000, Justice Andrews said a term of imprisonment was not appropriate in this case. The Crown opposed aspects of the sentence reduction.
During Davidson's sentencing, fellow Bridgecorp directors Rod Petricevic and Rob Roest looked on from the court's public gallery.
The pair, with directors Gary Urwin and Peter Steigrad, also face Securities Act charges and their trial is due to start on October 25.
Justice Andrews said that yesterday's plea and sentencing have no impact on their trial.
The remaining four directors have pleaded not guilty to misleading investors. Petricevic and Roest also face separate Serious Fraud Office charges, in a case due to go trial next year.
