OSC imposes permanent ban on Conrad Black

The decision follows hearings at the regulator last year.

See: Is Conrad Black a risk to Ontario’s capital markets?

While the panel ruled that it was not necessary to ban Black and Boultbee from trading in Ontario, it did rule that they be permanently banned from registration and from serving as directors or officers of an issuer, a registered firm, or an investment fund.

According to the panel’s decision, Black argued that it was not necessary to sanction him in Ontario on the basis that the conduct that led to his conviction was an isolated event; and that additional deterrence is not warranted; among other things. “Black submits that there is no reasonable likelihood of similar conduct by him occurring … and, accordingly, there is no need for an order to be issued against him to protect the public interest in Ontario,” the decision says.

However, the panel disagreed. It ruled that “the misconduct of the respondents was both serious and carried out in circumstances that warrant apprehension on our part that the future conduct of the respondents will be detrimental to the integrity of Ontario’s capital markets.” As a result, it found that sanctions are necessary to protect the integrity of Ontario’s capital markets.

“Both Black and Boultbee demonstrate a total disregard for and indifference to the findings of serious fraud by the U.S. courts and the creation of a scheme to defraud {Hollinger] and the shareholders of [Hollinger]. Their attitude with respect to the discharge of their responsibilities as officers and directors of public companies raises serious concerns in our minds relating to their future behavior in Ontario’s capital markets,” the panel said.

On the issue of deterrence, the panel said, “Black and Boultbee abused their positions of trust as officers and directors to enable the fraudulent conduct for which they were convicted to take place. In our view, the circumstances of this matter demonstrate the need for both specific and general deterrence.”

However, it did not agree with OSC staff that it is necessary to impose a trading ban on them. It notes that their misconduct did not involve trading securities. And, as the commission’s role is not to punish past conduct, but to prevent future conduct based on past conduct, it found that it was not necessary to impose a trading ban, or to deny them the use of exemptions.

Instead, the commission found that director and officer bans are warranted. “We do, however, believe that, it would be appropriate, for the purposes of investor protection, for the commission to prohibit the respondents from holding the positions of director or officer in circumstances where they could direct or influence the management of a business that is required to comply with the securities laws of Ontario. To do so would, in our view, properly limit their ability to undertake conduct in the future that would be detrimental to the integrity of Ontario’s capital markets.”

“We have also concluded that, in the circumstances described in these reasons, such prohibitions should be permanent as there is no basis in these specific circumstances in our view for considering that the risk of future misconduct is somehow circumscribed by the passage of time,” it said.

The panel declined to order any costs in the case. OSC staff sought almost $161,000 in costs, which Black opposed. The panel said that costs were not warranted, given that it does not typically order costs in these sorts of hearings; and, as Black and Boultbee were partially successful in the case.