Conrad Black is defiant in the face of news he has been permanently banned from acting as a director or officer of a company that issues securities in Ontario, saying Friday he has no interest in holding such positions anyway.
The Ontario Securities Commission released a decision Friday saying Mr. Black and former Hollinger International Inc. colleague John Boultbee will be banned from acting as directors or officers because they must be prohibited "from directing or influencing" the management of a company.
Mr. Black responded quickly, saying the ruling "is at least welcome as the comparatively inoffensive end of more than 11 years of persecution," and adding he has no plans to seek a board seat anyway.
"It was never a material issue, since, as I testified, no one could pay me enough to be a director or officer of a public company in that jurisdiction," he said in an e-mail.
He also took a swipe at the OSC, saying the regulator "destroyed" parent company Hollinger Inc. when it refused his plan in 2005 to privatize the company, and so "did not come to this latest issue with clean hands." He said the hearing was "very courteously conducted" but "shows again why the OSC must not become a national securities regulator."
An OSC hearing panel rejected a request from OSC staff to ban the pair from trading securities in Ontario, saying the misconduct that led to their fraud convictions in the United States was not based on trading violations, so such restrictions are not appropriate in the case.
Mr. Black was convicted in the U.S. for taking what the OSC called "contrived" non-competition payments from the proceeds of the sale of Hollinger newspapers. He was also convicted of obstruction of justice for removing boxes of materials from Hollinger's office in Toronto without authorization. He served 37 months in a U.S. prison and was released in 2012, when he returned to Canada.
Mr. Boultbee was also convicted for taking non-competition payments.
In testimony at a hearing last fall, Mr. Black said he had no plans to join a public company board but resented the implication he was unfit to do so. He added he feels "immense remorse" about the failure of Hollinger, but said he does not feel guilt about his actions and would not apologize for his alleged crimes.
The hearing panel, headed by OSC commissioner Christopher Portner, took issue with Mr. Black's unwillingness to accept responsibility for his actions and his lack of remorse, saying in its written decision that both he and Mr. Boultbee "demonstrate a total disregard for and indifference to the findings of serious fraud by the U.S. courts" which "raises serious concerns" about how they would behave in the future in Ontario's capital markets.
"The failure of the respondents to acknowledge in any way the legitimacy of the detailed findings of fraud against them in the U.S. legal proceedings (and in Black's case, the finding that he obstructed justice) raises serious concerns in our minds as to the reliability of their assurances that they pose no threat to Ontario's capital markets in the future," they said.
Mr. Black's lawyer, Peter Howard, proposed a compromise at the hearing last fall, saying his client was willing to voluntarily report to the OSC before accepting any role as a director or officer as an alternative to being permanently banned from holding the positions. He added Mr. Black poses no threat to any company because it is extremely unlikely he would ever again be in a similar position of receiving non-competition payments on a deal.
However, the OSC hearing panel said their concern was whether Mr. Black and Mr. Boultbee could be involved in any possible breach of securities rules, and not just the specific conduct that led to their U.S. convictions.
The panel also said it "would be manifestly inappropriate" to accept Mr. Black's compromise to inform the OSC before accepting a board position, saying such a voluntary undertaking could be withdrawn at any time and would not send an adequate message of deterrence to others.
Mr. Howard also argued that Mr. Black was ultimately convicted in the U.S. on only a small portion of the original allegations levelled against him, involving only a fraction of the non-compete payments cited in the original charges against him, so Mr. Black's final conviction was for minor matters. But the OSC panel rejected the argument, saying the convictions were still serious.
"In our view, there is no level of fraud that should not engage a consideration of appropriate sanctions," the decision concludes.
The bans imposed against Mr. Black and Mr. Boultbee include acting as a director or officer of any issuer, registrant or investment fund manager, and from working as a registrant in the investment industry or as an investment fund manager or promoter. The bans cover both publicly traded companies and private companies that issue securities in Ontario.
The decision not to ban the men from trading securities means Mr. Black and Mr. Boultbee will be able to trade for their own accounts. But the ban from becoming a registrant means they will not be able to work in a trading role in the financial industry.