Nelson fishing company Westfleet Fishing, its skipper and first mate have been fined a total of almost $70,000 for failing to weigh and report coral caught in their net when bottom trawling.
The fishing vessel Tasman Viking was also forfeited to the Crown at the Nelson District Court.
The Ministry of Primary Industries said the boat was trawling outside New Zealand waters in the South Pacific with fisheries officers on board.
It was required to report bycatch such as coral and sponges from the sea floor.
"All commercial fishers are required to hold a permit to fish the South Pacific Regional Fisheries Management Organisation fishing area, and reporting organisms from the sea floor such as coral and sponges caught is an important requirement," Fisheries New Zealand Regional Manager of Fisheries Compliance Howard Reid said in a statement.
"The rules are agreed by the countries of the South Pacific and are there for a reason - to protect the ocean environment and prevent fishing from causing damage to vulnerable marine ecosystems on the seafloor."
MPI said a lot of bamboo coral was hauled on board but was not weighed and reported.
It said if the amount of bycatch from the sea floor reaches a certain limit, fishing must stop.