A federal court judge entered a final judgment against Conrad Black, the former chairman and CEO of the newspaper publishing company Hollinger International, in a long-running fraud case.
Judge William T. Hart of the U.S. District Court for the Northern District of Illinois entered a final judgment Tuesday against Black, whose case was one of the highest-profile ones to hit the news in the Enron era.
The SEC’s complaint alleged, among other things, that Black fraudulently diverted money from Hollinger International to himself and other corporate insiders in the form of purported non-competition payments in the PMG Acquisition and Forum Communications Company newspaper sale transactions and made misstatements and omissions of material fact about these related party payments in Hollinger International's filings with the SEC.
The complaint further alleged that Black misled the investing public in a Nov. 17, 2003 press release about his intention to devote his time to an effort to sell Hollinger International assets for the benefit of all shareholders and not to undermine that process by engaging in transactions for the benefit of himself and Hollinger Inc.
Black was convicted of fraud and obstruction of justice charges in 2007 and sentenced to six and half years in prison and to pay his former company $6.1 million, along with a fine of $125,000. The Supreme Court heard an appeal of his case in 2009 and unanimously ruled in 2010 that the definition of “honest services fraud” in the trial judge’s instructions to the jury was too broad and ordered the federal appeals court in Chicago to review Black’s fraud convictions. His obstruction of justice conviction was upheld, but he was granted bail in 2010 and released from prison. Some of his fraud and obstruction of justice convictions were reversed on appeal, but he still returned to prison in 2011 to serve time on the remaining convictions and was released in 2012.
The final judgment in the civil case was the product of a settlement reached through a Court of Appeals mediation process after Black appealed the district court's Oct. 9, 2012 $6.1+ million judgment against him. The Oct. 9, 2012 judgment granted summary judgment in favor of the SEC with regard to certain of its claims in connection with the Paxton and Forum transactions and the Nov. 17, 2003 press release.
The final judgment permanently enjoins Black from violating the securities laws; orders him to pay disgorgement in the amount of $2,546,586.99 and prejudgment interest of $1,547,557.37 for a total of $4,094,144.36 to be paid to Chicago Newspaper Liquidation Corporation; and prohibits Black from acting as an officer or director of any public company. Black consented to the entry of the final judgment without denying the allegations of the SEC’s complaint.
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