The Ontario Securities Commission has refused a request by Hollinger Inc. founder Conrad Black to have his misconduct case thrown out even before a hearing is held.
The OSC is seeking to have Mr. Black banned from working in the financial industry or serving as a director of office of a public company. The U.S. Securities and Exchange Commission imposed a similar penalty last year, but its sanctions do not apply in Canada.
Mr. Black’s lawyer, Peter Howard, argued at a hearing in April that his client did not receive a fair trial in the U.S. so the OSC should not base its case on his conviction.
The hearing panel ruled Monday there was no evidence that Mr. Black received an unfair trial, noting he personally thanked the original trial judge at his first sentencing hearing for her “unfailing courtesy and efficiency” in handling the trial.
Mr. Black’s case does not represent a harm to the fairness of the administrative process, the panel ruled, which is a key test in ordering a stay of proceedings.
“In our view, quite the opposite would be true in the Black matter,” the ruling states.
The hearing panel also said the OSC is acting appropriately in seeking a so-called reciprocal order against Mr. Black, which allows the regulator to base its case on the fact he was found guilty in a U.S. court without having to rehear all the original evidence in the case. A hearing for the reciprocal order is scheduled for October 3.
The OSC ruling said Mr. Black had top lawyers working for him and took advantage of every opportunity to appeal court rulings.
Mr. Howard argued in April that Mr. Black, 69, presents no danger to the public and sanctions against him are not necessary.
Mr. Black was found guilty of fraud and obstruction of justice and served 37 months in prison before his release in 2012. He was accused with other Hollinger executives of participating in a scheme to divert company money to themselves by taking “non-compete” payments from the sale of Hollinger newspapers.
He said the remaining convictions that were upheld following appeals in the criminal case were minor and did not warrant further disciplinary proceedings.
Mr. Black offered to keep in place indefinitely a voluntary, temporary agreement he signed with the OSC in 2006 promising not to serve as a director or officer of a public company while his case was still ongoing.
Mr. Howard said his client is not willing, however, to reach a formal settlement with the OSC on the same terms because that would require him to admit wrongdoing, which he said his client would never do.
The hearing panel rejected the option of keeping the temporary agreement in place, saying it was never intended to be a final judgment in the case.
They said if Mr. Black ever sought to cancel or amend the deal, there would be no formal decision to fall back on. At such a time, it could be far too late for OSC staff to revive the hearing.
There is “a public expectation that the OSC will finally address and make a determination with respect to the allegations against Black,” the ruling noted.