Russell Johnson, 41, director of failed broker Sonray, had sought leave to appeal his sentence but Court of Appeal Justices Mark Weinberg and Joseph Santamaria rejected the application on Tuesday.

Johnson had pleaded guilty to seven dishonesty offences, including obtaining a financial advantage by deception, and was jailed for six years and six months with a non-parole period of three years and six
months.

Johnson and his brother-in-law, chief executive Scott Murray, had manipulated the books of Sonray between December 2007 and June 2010. The broker's collapse left 3500 clients $46.7 million out of pocket.

Johnson also stole $441,000 from Sonray to pay back a loan from his father-in-law, Swann Global managing director John Murray, which was used to buy a house in Toorak.

He siphoned an additional $300,000 out of Sonray for personal expenses including credit card debts, private school fees and mortgage payments.

Scott Murray was jailed for five years in 2011 after pleading guilty to fraud and theft.

In a judgment handed down on Tuesday, Justice Santamaria said Johnson, a father of two, claimed the sentencing judge had failed to take into account the impact on Johnson himself of the hardship his jailing would cause his family, given the ill health of his wife who was diagnosed with a brain tumour in 2007 and was also facing the prospect of heart surgery.

Justice Santamaria quoted a psychological report that claimed it was inevitable Johnson, who was severely depressed, would suffer deteriorating mental health in prison.

"As a result of the collapse of Sonray Capital Markets Pty Ltd he and his wife have lost their home and their holiday house and monies owed to them ..." the report said. "He and his wife now have no assets. In my opinion at the time of offending Mr Johnson's ability to correctly perceive his circumstances and to therefore engage in prudent decision making was compromised as a result of him suffering from a depressive disorder."

The psychologist said that at the time of offending, Johnson was not suffering from a specific psychotic disorder "but at times his thought processes were so faulty, he was engaging in thinking which was out of touch with reality".

But Justice Santamaria noted Johnson did not tell the psychologist about the supposed impact on himself of the hardship that his jailing would have on his family.

Johnson also claimed he should not have been jailed for longer than his brother-in-law but Justice Santamaria said Scott Murray had co-operated more with authorities.