David Radler, the former COO and deputy chairman of media company Hollinger International Inc., has agreed to pay US$28.7 million to settle fraud charges, the U.S. Securities and Exchange Commission said Friday.

Under the terms of the settlement, Radler agreed to pay US$23.7 million in disgorgement and US$5 million in civil penalties. He was also barred from serving as an officer or director of a public company, the SEC said.

Radler was also enjoined from violations of the antifraud, proxy, books and records, reporting, and internal control provisions of the federal securities laws.

He agreed to the settlement without admitting or denying the charges.

Linda Chatman Thomsen, director of the SEC’s Division of Enforcement, said, “Radler and others misappropriated millions of dollars from Hollinger International and made numerous misstatements to shareholders as part of their scheme. The tough sanctions in this settlement, including one of the largest civil penalties in recent years against an individual wrongdoer, reflect our resolve to act forcefully against corporate officers who perpetrate fraud against those whom they were supposed to serve, the shareholders of the company.”

The director of the SEC’s Midwest Regional Office, Merri Jo Gillette, said: “Officers who steal from the company coffers have no place in the boardroom. In this case, Radler participated in a scheme to divert millions for his own benefit at the expense of public shareholders.”

On Nov. 15, 2004, the SEC filed its action against Radler, Conrad Black, Hollinger International’s former chairman and CEO, and Hollinger, Inc., Hollinger International’s controlling shareholder, alleging that from approximately 1999 through 2003, the defendants engaged in a fraudulent and deceptive scheme to divert cash and assets from Hollinger International, Inc., through a series of related party transactions.

The SEC’s complaint alleged, among other things, that Black and Radler diverted to themselves, other corporate insiders and Hollinger, Inc. approximately $85 million of the proceeds from Hollinger International’s sale of newspaper publications through purported “non-competition” payments. The complaint also alleged that Black and Radler orchestrated the sale of certain of Hollinger International’s newspaper publications at below-market prices to another privately-held company owned and controlled by Black and Radler, including the sale of one publication for US$1. The complaint further alleged that in order to perpetrate their fraudulent scheme, Black and Radler misled Hollinger International’s Audit Committee and Board of Directors concerning the related party transactions and also misrepresented and omitted to state material facts regarding these transactions in Hollinger International’s filings with the Commission and during shareholder meetings.

The SEC acknowledged the assistance of the Ontario Securities Commission.

The SEC’s civil action is separate from the criminal proceeding now taking place in Chicago, where Radler has pleaded guilty and is co-operating in the prosecution of Black and three other former Hollinger International Inc. executives.