TORONTO – Conrad Black’s long-standing legal battle with the Ontario Securities Commission will continue in October, but the former media mogul’s lawyer says he’s considering a request to have the proceedings stayed.
During a brief hearing Friday morning, lawyer Peter Howard said the proceedings were “entirely unnecessary” because a similar case involving Black has already been dealt with in the United States.
Black and the U.S. Securities Commission recently came to a settlement, with Black agreeing to pay US$4.1 million in restitution and abide by limitations on his business activities.
“Why are we spending the OSC’s money on an unnecessary hearing?” Howard said.
However, the OSC said it plans to use the U.S. case to argue for similar restrictions on Black and his co-accused — former company executives Peter Atkinson and John Boultbee — in Ontario.
Jed Friedman, a lawyer for the OSC, told the hearing that Ontario investors should have the same protections as those in the U.S.
A confidential pre-trial hearing was then set for Oct. 21.
Black, former head of the Hollinger media empire, was not at the hearing but his former colleagues were present via teleconference.
The OSC alleges directors and officers of Hollinger Inc. and Hollinger International engaged in “a scheme” to line their pockets with company proceeds through a complicated system of “non-competition” payments.
The OSC’s case deals with many of the same issues covered by U.S. court and regulatory decisions.
Now that the lawsuits in the United States have wrapped up, regulators in Canada are moving ahead with their own proceedings to determine whether Black and his former colleagues should be banned from buying or trading in securities and from becoming directors of public companies in Ontario.
In November, it will be a decade since Black agreed to resign as chief executive of his main U.S. company after an internal review accused him and others of improperly diverting money from Hollinger International to Hollinger Inc.
Hollinger International was a U.S. public company, under the jurisdiction of the Securities and Exchange Commission, while Hollinger Inc. is a Canadian company under the OSC’s purview.
Most of the OSC’s original allegations against Hollinger and its senior executives and officers, filed in March 2005, were removed in a revised version issued July 12.
The revised OSC statement replaces pages of allegations from the OSC staff with a summary of U.S. proceedings against Black and two of his former senior executives. However, the OSC enforcement staff reserved the right to bring forward further allegations.
Black, Atkinson and Boultbee were found guilty of three counts of fraud each by a U.S. jury in 2007, and Black was also convicted of one count of obstruction of justice.
The 7th U.S. Circuit Court of Appeals later tossed two of the three fraud convictions against the men because the U.S. Supreme Court ruled that one of the laws used to convict them had been too broadly applied.
Black ended up serving 37 months out of a 42-month sentence in a Florida prison, and was fined $125,000.
Among Hollinger’s holdings were the Daily Telegraph, a major London-based newspaper, the Chicago Sun-Times and numerous Canadian publications including the National Post, which Black founded.