Founded in 2007, the investment firm owned 80% of a company based in Costa Rica, which in-turn owned plantation land, a sawmill and the infrastructure to plant trees.
It attracted 3,500 UK investors who collectively put around £70m ($91.6m, €81.8m) into the venture.
The unregulated investment scheme collapsed in December 2015 after it was abandoned by its UK directors and the plantation suffered hurricane damage.
In 2012, the directors entered Ethical Forestry into a tax planning scheme, which made £28.8m available to them through loan accounts.
The company’s financial statement for 2012 to 2014 show that more than £19m was withdrawn during this period.
In 2013, HM Revenue & Customs informed the Ethical Forestry it was going to investigate the tax planning scheme.
This did little to deter the directors, however, and £7.2m of the £19m was withdrawn after the taxman made it known the firm was in its crosshairs.
This triggered an investigation by the Insolvency Service, which announced the bans on 8 May.
The chief investigator for the Insolvency Service described the case as “relatively unusual”.
“The directors were aware that HMRC were investigating the tax planning scheme, through which they had already drawn very substantial sums from the company, and yet in this knowledge they continued in the same vein for a further 12 months, taking an additional £7m,” said Anthea Simpson.
“We considered that this was unacceptable rather than ethical, and amounted to unfit conduct which justified disqualification.”
The three individuals handed bans of six years each are:
Matthew Pickard, who is described as the managing director and founder of Ethical Forestry.
Stephen Greenaway, who was appointed co-director alongside Pickard when the company was incorporated.
Paul Laver, who was appointed as a director in November 2009.
In August 2017, International Adviser reported that investors were being urged to make claims for compensation on the grounds that their original investment could have been mis-sold.
Many were introduced to Ethical Forestry via unregulated investment brokers, such as Avacade Investment Options, which offered free pension reviews.
A number of the investors transferred their occupational pensions into self-invested personal pensions (Sipps), using providers such as Liberty Sipp.