- The Washington Times - Monday, November 15, 2004

NEW YORK (AP) — The Securities and Exchange Commission filed a lawsuit yesterday accusing newspaper tycoon Conrad Black and his former top deputy of defrauding shareholders of Hollinger International Inc., a publishing company Mr. Black used to run.

In a suit filed in federal court in Chicago, where Hollinger International is based, the SEC accused Mr. Black and David Radler of siphoning money from the company to themselves and then misleading the company’s board about the transactions.

Stephen Cutler, the SEC’s head of enforcement, said the two men “abused their control of a public company and treated it as their personal piggy bank.” Hollinger publishes the Chicago Sun-Times and the Jerusalem Post. Until recently it also owned the Daily Telegraph of London.

The suit adds to Mr. Black’s legal troubles. He is already being sued by his own company for the recovery of money it says he improperly diverted to himself and his associates. That lawsuit makes broader accusations against Mr. Black and claims that he caused more than $500 million in damages to the company.

The SEC’s case focuses on a narrower set of transactions. It seeks civil penalties against Mr. Black and an order barring him and Mr. Radler from serving as officers or directors of public companies. The SEC also wants Mr. Black’s voting shares of Hollinger International placed in a trust.

Mr. Black was removed as chairman and CEO of Hollinger International after an internal investigation found that he and his associates schemed to siphon away millions of dollars in company funds. But he remains the company’s controlling shareholder.

No criminal charges have been filed against Mr. Black. Merri Jo Gillette, the director of the SEC’s Midwest Regional Office, noted that in a civil fraud case the SEC need only prove that the defendant knew or should have known that the conduct he was engaging in was fraudulent, as opposed to a criminal case in which guilt must be proved beyond a reasonable doubt.

A special committee of Hollinger International’s board of directors is suing Mr. Black and his associates to recover what it says are hundreds of millions of dollars that were improperly diverted. That lawsuit also names company director Richard Perle as a defendant, asserting that he breached his fiduciary responsibility.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide