OSC approves settlement with Peter Atkinson in Hollinger case; barred as director

TORONTO – Peter Atkinson, a former Hollinger executive who several years ago faced fraud charges in the U.S. along with Conrad Black, has reached a settlement with the Ontario Securities Commission that forever bars him from acting as a director of a public company in that province.

He will also have to permanently refrain from becoming an officer of a public company in Ontario and from trading or acquiring any securities of Hollinger Inc.

As part of the deal, Atkinson also had to acknowledge he was convicted of one count of fraud in the Unites States in connection to so-called “non-compete” payments, and that the United States Securities and Exchange Commission found that he had committed securities fraud and barred him from being a director or officer as well.

The OSC had alleged directors and officers of Hollinger Inc. and Hollinger International engaged in “a scheme” to line their pockets with company proceeds through a complicated system of “non-competition” payments.

The case dealt with many of the same charges initially brought in the U.S., although many of those were eventually dismissed.

Black, Atkinson and another former executive, John Boultbee, were found guilty of three counts of fraud each by a U.S. jury in 2007, and Black was also convicted of one count of obstruction of justice, but two of the three fraud convictions against the men were overturned on appeal.

The OSC settlement relates only to Atkinson and does not involve Black or Boultbee, who have a confidential hearing with the commission scheduled for Oct. 21.

Black’s lawyer hassaid he’s considering a request to have the proceedings stayed because similar issues have already been dealt with through years of litigation in the United States.

The OSC announced the settlement with Atkinson last week, but did not disclose details at the time, saying it was conditional on the hearing Monday to determine whether the agreement was in the public’s interest.

The securities regulator has faced some criticism for failing to prosecute allegations of white collar crime as aggressively as do authorities in the United States.

Some observers agree with Black’s lawyers that the proceedings seemed redundant given the harsh penalties already levied against the men in the U.S. Others have pointed out that the OSC has a duty to pursue the case because Hollinger was a publicly traded company.

Tom Atkinson, director of enforcement at the OSC, said in a statement that the settlement “makes clear that individuals who are convicted of securities-related fraud will not have the privilege of free access to the Ontario capital markets.”

As a result of the criminal trial in the U.S., Atkinson was given time served and fined $3,000. He was also asked to pay back $10,000 in legal costs as part of a Law Society of Upper Canada decision in June, which also suspended him from practising law for an additional two years.

There are no financial penalties associated with the OSC settlement.

The OSC announced in July it would move ahead with its own proceedings to determine whether Atkinson, Black and Boultbee should be banned from buying or trading in securities and from becoming directors of public companies in Ontario, because by then all of the litigation in the U.S. had run its course.

However, most of the OSC’s original allegations against Hollinger and its senior executives and officers, filed in March 2005, had been removed in a revised version issued July 12.