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Securities violations cost Conrad Black $6.1-million

Conrad Black speaks in Toronto on June 22, 2012.

Chris Young/THE CANADIAN PRESS

Conrad Black's scathing critique of the American justice system in his book A Matter of Principle has come back to haunt him in a Chicago court.

A U.S. federal judge has cited comments Lord Black made in the book in ordering the former media tycoon to pay $6.1-million in penalties for violating U.S. securities laws during his time at Chicago-based Hollinger International Inc.

"Black has advanced no reason to believe that he now has any respect for the securities laws or any regret for the losses or costs his violations have caused," wrote Judge William T. Hart of the U.S. District Court for the Northern District of Illinois. "He is intransigent in his denunciation of the courts and the justice system. See Conrad Black, A Matter of Principle."

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Lord Black said he plans to appeal the ruling.

"The government lost its claim for more, and my book, which is having a fire launch here in the U.K., was attached as an exhibit, and we will appeal the rubbish of the basic finding," he said in an e-mail from London.

The Securities and Exchange Commission also seized on Lord Black's book, arguing in court filings that the comments were so outrageous he should be ordered to pay an additional $4.1-million in penalties, on top of the $6.1-million. "Impenitence of this magnitude is deserving of significant penalties," the SEC argued, referring to the text that was published last year.

The SEC has been after Lord Black since 2004, when it charged him with violating securities laws while at Hollinger. The civil case has been running off and on in the same federal courthouse where Lord Black battled criminal charges involving fraud at Hollinger. He was ultimately convicted of one count each of fraud and obstruction of justice and spent roughly three years in prison.

The SEC won a judgment against him in 2008, which included banning him from serving as an officer or director of a U.S. public company. Judge Hart awaited the final outcome of appeals in the criminal case before imposing the financial penalty on Oct. 9.

During its submissions to Judge Hart on the penalties, the SEC cited A Matter of Principle, arguing it showed Lord Black had "grown even less contrite with time."

The commission quoted passages of the book, noting that at one point Lord Black cast himself as a victim of the "fetid, ward-heeling political bazaar of the Chicago Federal Courthouse, made no less sinister by the Little Red Riding Hood demeanour of [federal Judge Amy] St. Eve and the stertorous and insolent biases of [appeal court Judge Richard] Posner." It also added that "notwithstanding such perceived indignities, Black magnanimously offers to 'forgive America for wrongly imprisoning me and victimizing my shareholders.' "

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Lord Black's lawyers countered by arguing the SEC was quoting selectively from the book and that it had nothing to do with the civil case. They noted that not only had Lord Black gone to jail, he has also been barred from entering the U.S. for 30 years and he has spent nearly $30-million on fines, legal bills and other penalties.

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About the Author
European Correspondent

Paul Waldie has been an award-winning journalist with The Globe and Mail for more than 10 years. He has won three National Newspaper Awards for business coverage and been nominated for a Michener Award for meritorious public service journalism. He has also won a Sports Media Canada award for sports writing and authored a best-selling biography of the McCain family. More

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