NEW YORK : The penalty stemmed from a case in which Judge Arthur Engoron found Trump, his two adult sons, and the Trump Organization guilty of inflating property values to secure favorable loans. Engoron initially ordered Trump to pay $355 million, but with interest, the sum swelled to more than $500 million.

In its decision, the New York Supreme Court’s Appellate Division panel stated that while Trump was indeed liable for fraud, the size of the penalty violated constitutional protections against excessive punishment.

The original judgment had also barred Trump from serving as a company director or seeking loans from banks in New York for three years. The appeals panel was divided on aspects of the case but agreed that the financial penalty needed to be reduced.

The lawsuit was brought by New York Attorney General Letitia James, who accused Trump and his family of “persistent and repeated fraud.” While the ruling relieves Trump of a massive financial burden, it leaves intact findings that could continue to shape his business dealings in the state.