Sinziana R. Hennig

The Ontario Securities Commission held a hearing to consider whether to impose sanctions on Conrad Black and John Boultbee under the inter-jurisdictional enforcement provisions of the Securities Act, based on their criminal convictions for mail fraud and obstruction of justice in the United States, and Black's settlement with the SEC.

The Commission found that the US convictions arose from conduct related to securities and that the US proceedings met Canadian standards of fairness.

Concluding that sanctions were necessary for specific and general deterrence to protect Ontario's capital markets, the Commission ordered permanent bans prohibiting Black and Boultbee from acting as directors or officers of any issuer, registrant, or investment fund manager.

Staff's request for costs was denied.

The Ontario Securities Commission heard several procedural motions in a section 127(10) proceeding against the respondents.

The panel dismissed a respondent's motion to sever his case, finding substantial commonality in the allegations and no undue prejudice.

The panel also dismissed requests to vary the severance order and to adjourn the hearing pending an appeal.

Staff's motion for directions on the scope of admissible evidence was dismissed, with the panel declining to review witness statements a priori but cautioning against re-litigating matters decided in U.S. proceedings.

A motion to call a specific witness was also dismissed.

Conrad M. Black brought a motion to stay an Ontario Securities Commission proceeding seeking a reciprocal order under s. 127(10) of the Securities Act based on his U.S. fraud convictions.

Black argued the proceeding was an abuse of process and proposed that his interim undertaking remain in effect instead.

The Commission dismissed the stay motion, finding that a reciprocal order proceeding is an appropriate exercise of its statutory mandate to protect Ontario's capital markets and does not constitute an abuse of process.

The Commission also provided directions limiting the scope of evidence at the upcoming hearing to matters relevant to crafting a protective order, explicitly prohibiting the re-litigation of the U.S. proceedings.