Former federal health minister Michael Wooldridge has been fined $20,000 and banned from managing a corporation for two years and three months over the collapse of a retirement village company.

Dr Wooldridge was one of five former directors of the Prime Retirement and Aged Care Property Trust to be penalised in the Federal Court after the Australian Securities and Investments Commission (ASIC) took legal action.

Investors lost more than $500 million when Prime Retirement collapsed in 2011.

Dr Wooldridge, a minister in the Howard government, issued a statement saying he regretted any actions that may have contributed to a loss by investors.

He said the judgement noted he is an honest man and made no personal gain from any of the contraventions of the Corporations Act.

Dr Wooldridge said he intended to appeal against the original judgment finding liability and would also continue to defend a related action filed in the Victorian Supreme Court.

The Federal Court's Justice Murphy found that the company's directors contravened multiple duties, as well as the prohibition on involvement in related party transactions.

The court found company's founder Bill Lewski most culpable, fining him $230,000 and banning him from managing a corporation for 15 years.

"The directors' conduct gave rise to a serious breach of trust as a listing fee of $33 million was wrongfully paid from trust property to APCHL [the parent company of the trust] (in its personal capacity) and through it to Mr Lewski. Those monies have never been repaid," Justice Murphy noted in a judgment summary.

"In my view he [Mr Lewski] instigated and orchestrated the relevant amendments to the Prime Trust Constitution, bringing them into effect, and facilitating payment of the $33 million listing fee even though he was the primary beneficiary of that fee, payable from trust property."

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Justice Murphy also said Mr Lewski showed no contrition for his actions and is a risk of reoffending.

He said Dr Wooldridge and two other directors, Kim Jaques and Mark Frederick Butler, were not dishonest but "capitulated to the interests of Mr Lewski", rather than putting the best interests of trust members first.

"The conduct of Dr Wooldridge, Mr Butler and Mr Jaques was significantly less blameworthy than Mr Lewski's and in my view their contraventions were honest, although serious, failures," he added.

Justice Murphy found that another director, Peter Clarke, "failed to give any attention at all" to the matters before the relevant board meeting, and he escaped a ban and received a $20,000 penalty instead.

Australian Securities and Investments Commission boss Greg Tanzer said the penalties send an important message.

"The key message for directors is of course that they play a very important role as gatekeepers in the Australian financial system, and in this case that as directors of an investment trust that they owe very important duties for the investors in that trust and that in this case they failed in those duties," he said.