OSC restarts Hollinger case

Black, John Boultbee and Peter Atkinson are accused of cheating shareholders and tax authorities in the U.S. and Canada, specifically, improperly diverting proceeds from the now-defunct media giant Hollinger International to themselves through “non-competition” payments.

It’s alleged they did not have approval for these payments, and had made misrepresentations about them through public disclosure.

The charges had initially been filed in March 2005, but were put on hold due to related legal action in the U.S. The OSC said it has decided to restart its case since those proceedings have since wrapped up.

Also on Friday, the OSC said it was withdrawing separate allegations against Hollinger Inc., because the company was in court protection from its credits and is subject to a cease trade order. It was delisted on the Toronto Stock Exchange in August 2008. Hollinger has since been sold off piece by piece over the past few years.

In July 2007, Black, Boultbee and Atkinson were found guilty of three counts of fraud each by a U.S. jury. Black was also convicted of one count of obstruction of justice for removing documents from the Toronto offices of Hollinger, which at one time controlled a newspaper empire that operated in Canada, the United States, Britain and elsewhere.

After exhausting their appeals, Black was sentenced to 42 months and fined $125,000. He served 37 months in a Florida prison before returning to Canada under a temporary resident permit as he is no longer a citizen.

In a highly-publicized battle in 2001, he renounced his Canadian citizenship so he could accept a peerage in the British House of Lords.

Boultbee was sentenced to time served, fined $500 and ordered to pay $15,000 in restitution to the Sun-Times Media Group. Atkinson was given time served and fined $3,000.

If found guilty, the OSC will determine what kind of reprimands to pursue against the accused, including imposing a permanent ban on them from acting as an officer or director of a public company in Ontario. They can also be banned from trading or acquiring any securities.

In November 2012, the OSC withdrew charges against Black’s former business partner, David Radler, as part of a plea agreement that led to him being barred from heading a public company in Ontario. (See Investment Executive, Former Hollinger exec reaches plea agreement with OSC, Nov. 14, 2012.)

Radler is also prohibited from becoming a registrant, employee, director or officer of a registrant or an affiliated public company in Ontario. He must also refrain from directly or indirectly trading or acquiring securities related to Hollinger Inc.

He also pleaded guilty to one count of mail fraud at U.S District Court and was sentenced to 29 months in jail and ordered to pay a fine of $250,000.

As part of his plea bargain, Radler testified for the prosecution in a lengthy trial against his former colleagues, including once good friend Black.

In 2007, Radler reached an agreement with the U.S. Securities and Exchange Commission and agreed to pay a fine of US$28.7 million and be permanently barred from serving as a company director or officer in the U.S.