Securities and Exchange Commission
chief Conrad Black and another former executive of the newspaper chain, claiming they committed securities fraud.
The agency alleges that between 1999 and 2003, Black, former operating chief David Radler and Black's Hollinger Inc. investment vehicle "engaged in a fraudulent and deceptive scheme to divert cash and assets" from Hollinger International, which is listed on the
New York Stock Exchange
and has operated as a subsidiary of Hollinger Inc. The agency claims the two men and the investment company then "concealed their self-dealing from Hollinger International's public shareholders."
"Black and Radler abused their control of a public company and treated it as their personal piggy bank," said SEC enforcement director Stephen Cutler. "Instead of carrying out their responsibilities to protect the interest of public shareholders, the defendants cheated and defrauded these shareholders through a series of deceptive schemes and misstatements."
Black, who in the past has denied wrongdoing, was forced out early this year as chairman and CEO of Hollinger International after an internal investigation found that he and his associates schemed to siphon away millions of dollars in company funds. He remains the company's controlling shareholder, though, and the company's board of directors is operating under court supervision.
Hollinger rose 32 cents Monday to $18.12.