Prosecutors: ex-<I>'Post</I>' owner Black engaged in insider trading
Federal prosecutors leveled new allegations against former newspaper tycoon Conrad Black, saying he engaged in insider trading and illegally posted information about his former company on a financial message board.
By ASHLEY M. HEHER, APconrad black 88(photo credit: )
Federal prosecutors leveled new allegations against former newspaper tycoon Conrad Black, saying he engaged in insider trading and illegally posted information about his former company on a financial message board.
A lengthy filing this week in US District Court in Chicago spells out a dozen alleged misdeeds by the former Hollinger International Inc. chairman and CEO, who is accused of plundering millions of dollars from the company's coffers.
Black was forced from the helm of the company and is scheduled to go to trial March 1 on fraud and racketeering charges.
The media empire, which once included The Daily Telegraph of London, The Jerusalem Post and Canada's largest newspaper group, has since been largely dismantled. The Chicago Sun-Times is the last remaining major property of the company, now called the Sun-Times Media Group Inc.
Prosecutors on Monday asked US District Judge Amy St. Eve to include the newest allegations as evidence in the ongoing case against Black.
"Black did not make a distinction between his money and that belonging to a public company," prosecutors wrote. "It is this mind-set that contributed to his fleecing of International." Black is charged with misusing company money to bankroll his lavish lifestyle and cheating on his taxes. He has pleaded not guilty.
A message left with Edward Greenspan, Black's attorney, was not immediately returned.
Federal authorities say Black in 1998 urged a company vice president to respond to a post on a Yahoo message board about Hollinger's seemingly static stock price.
When the executive, Paul Healy, explained responding would violate federal guidelines from the Securities and Exchange Commission, Black posted a response anonymously, prosecutors said in the filing Monday.
But not before chastising Healy for his hesitation.
"Don't be so strait-laced," Black wrote to Healy. "... Get our story out." Authorities said Black, along with other officials, used insider trading to boost Hollinger stock in 1998, arranging for the Canadian company Brascan to buy Hollinger shares at the same time short-sellers were unloading their stock. At the time, Black was a director at Brascan, now called Brookfield Asset Management.
"While Brascan used its own funds to purchase the shares, Black guaranteed their downside and interest rate, and also guaranteed their profit," prosecutors wrote, saying Black and other executives received cash from the deal.
Katherine Vyse, a spokeswoman for Toronto-based Brookfield, said the company was reviewing the matter and could not comment.
Among the other allegations, prosecutors say Black:
* deliberately withheld documents from prosecutors.
* spent nearly $9 million of Hollinger's money to purchase memorabilia from Franklin D. Roosevelt, without seeking prior approval from the company's board. The memorabilia, which Black used to pen a 2003 biography of the former US president, was stored and displayed at Black's home.
* abused Hollinger's charitable donations, attributing the company's donations to him and his family.
* used company money to pay for handbags, jogging attire, opera tickets and other personal items for himself and his wife.
