Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Wednesday, March 26, 2008

Hollinger Settles SEC Fraud Charges

The SEC settled its federal district court action against Hollinger Inc., a Canadian corporation and the controlling shareholder of Sun-Times Media Group, Inc., formerly known as Hollinger International, Inc., pending in the United States District Court for the Northern District of Illinois.  The SEC filed its action against Hollinger Inc., Conrad M. Black, Hollinger International's former Chairman and CEO, and F. David Radler, Hollinger International's Deputy Chairman and COO, 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. ("Hollinger International"), through a series of related party transactions and also made misrepresentations regarding these transactions in Hollinger International's filings with the Commission.  Radler previously entered into a settlement with the Commission concerning the allegations against him in this case.

Hollinger Inc., without admitting or denying the allegations in the complaint, has consented to the entry of a final judgment which permanently enjoins it from federal securities violations. The Final Judgment also orders Hollinger Inc. to pay a total of $21,279,471.84 in disgorgement, representing $16,550,000 in alleged non-competition payments received by Hollinger Inc., plus prejudgment interest thereon in the amount of $4,729,471.84. The $21,279,471.84 paid to Hollinger International in satisfaction of the judgment against Hollinger, Inc. and Conrad Black in the action captioned Hollinger International, Inc. v. Black, et al., 844 A.2d 1022 (Del. Ch. C.A. No. 183-N), shall be credited dollar-for-dollar toward the disgorgement in this action. The settlement is subject to approval of U.S. District Judge William T. Hart.

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