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Livent co-founder Myron Gottlieb leaves the courtroom with lawyer Brian Greenspan (L) after a sentancing hearing for Livent Inc. co-founder Garth Drabinsky in Toronto, July 7, 2009.Mark Blinch/Reuters

The Ontario Securities Commission's new settlement agreement with Livent Inc. founder Myron Gottlieb is destined to become a road map for Bay Street lawyers representing stubborn business executives who don't want to admit to wrongdoing in any settlement agreement with the regulator.

Mr. Gottlieb admits to no specific wrongdoing at Livent in Tuesday's agreement, allowing him to settle his case while continue to insist he did not direct an accounting fraud at the live theatre company – despite being criminally convicted and sentenced to four years in jail. Mr. Gottlieb has steadfastly refused to make any public admissions about knowingly participating in the fraud, even to a Parole Board of Canada panel pondering his release from jail.

The OSC normally insists that settlement agreements spell out the details of the wrongdoing being admitted in the deal, requiring people to publicly acknowledge their specific breaches of the law. Mr. Gottlieb did not do so in his settlement agreement.

At first glance, it could appear he is taking advantage of controversial new rules introduced earlier this year by the OSC allowing no-contest settlements, in which people accused of wrongdoing can settle their cases without having to admit wrongdoing.

But the OSC has said it would not allow no-contest settlements in cases where the person "has engaged in abusive, fraudulent or criminal conduct," and the commission said Mr. Gottlieb's agreement was not a no-contest settlement. Instead, it was a settlement that falls under a different OSC initiative to reduce the need for lengthy hearings by seeking reciprocal orders based on convictions in other forums.

The commission has long had the power to rely on convictions from other regulators or from criminal courts, to impose penalties in Ontario without having to hold a lengthy hearing to duplicate all the evidence and testimony from a complex trial. Over the past two years, the regulator has ramped up its use of its reciprocal powers, saying they allow cases to be resolved far more quickly and efficiently.

In 2013, for example, the OSC withdrew its allegations against Mr. Gottlieb (as well as business partner Garth Drabinsky and former Livent executive Gordon Eckstein). The regulator replaced them with a far shorter statement of allegations, simply saying that the three men were convicted in Ontario Superior Court, and their conviction provides the basis for OSC penalties that would bar them from working in Ontario's capital markets.

The OSC similarly re-crafted its allegations against Hollinger Inc. founder Conrad Black, withdrawing its original detailed statement of allegations and replacing it in 2013 with a simplified statement that relies on his U.S. convictions as the basis for imposing penalties in Ontario.

At a hearing in April, lawyer Peter Howard, who is representing Mr. Black, said his client would never settle his case with the OSC because he refuses to make any admissions of wrongdoing. A hearing in Mr. Black's case is scheduled to start Oct. 6, but Mr. Howard may find himself studying the wording of Mr. Gottlieb's agreement in advance of that date.

The facts laid out in Mr. Gottlieb's settlement essentially list the dates when Mr. Gottlieb worked at Livent and the dates he was charged by the RCMP and convicted of fraud in the case. There are no details about his role in conducting the fraud at the company. In other words, Mr. Gottlieb admits to exactly what he was accused of under the new version of the OSC's allegations – namely that he was convicted of fraud in criminal court and served a prison sentence in the case.

OSC spokeswoman Carolyn Shaw-Rimmington said the settlement does not contain detailed admissions because the Ontario court detailed its findings against Mr. Gottlieb in his conviction. "By acknowledging the fraud convictions in the settlement agreement, Mr. Gottlieb acknowledges the legitimacy of the convictions and the fact that the convictions constitute a basis for a sanctions order," she said.

Even if Mr. Gottlieb adopts that interpretation of what he was acknowledging by signing the settlement, he still can say he has made no detailed admissions about his role in the fraud. If that was disappointing to the OSC, it could hardly object. It opted to narrow its case only to the fact of his criminal conviction, so it can reasonably be asked to settle the case with an admission of that fact. The admissions answer the accusations. The OSC recently won a challenge to its practice of using its reciprocal powers, giving the commission more momentum to turn to that route more often. Mr. Black launched the challenge, asking for the right to present a full defence to fraud allegations on the grounds his U.S. trial was unfair and should not be relied on as a basis for a reciprocal order.

His challenge was denied by an OSC panel, which rejected the claim his U.S. trial was unfair. There was nothing in the decision to restrict the use of reciprocal powers in future cases, and no new grounds for defence to those facing a reciprocal hearing. A settlement appears like an increasingly reasonable option when a case only requires the OSC to prove the fact of a conviction in another forum.

Mr. Gottlieb is not the first person to settle a case that is based on the OSC's reciprocal powers, but his is certainly the highest-profile settlement of its kind to be approved by the commission in years. The structure of his agreement will be dissected by others, and we can expect to see many more settlements in the future in which respondents admit they were convicted in another forum, but own up to little else.