The recent decision in Re Conrad M. Black et al. illustrates how the Ontario Securities Commission (OSC) will use its inter-jurisdictional enforcement authority to impose sanctions relating to conduct in other jurisdictions to protect Ontario’s capital markets. Further, the decision reinforces that the OSC’s public interest power must only be invoked to restrain apprehended future misconduct and not to punish past behaviour.


In March 2005, an OSC proceeding was commenced against Conrad Black, John Boultbee (Respondents) and other former officers and directors of Hollinger Inc. The OSC alleged that, among other things, the Respondents improperly diverted funds and failed to disclose insider interests and conflicts of interest. The OSC proceeding was adjourned pending resolution of criminal and civil proceedings in the United States.

Following the trial and appeals in the United States, Mr. Black was convicted of mail fraud and obstruction of justice while Mr. Boultbee was convicted of mail fraud. The mail fraud convictions related to “non-competition” payments made to the Respondents as part of a sale of corporate assets. Mr. Black was sentenced to 42 months of imprisonment, Mr. Boultbee was sentenced to 329 days and both Respondents were ordered to pay fines. In addition, Mr. Black entered into a consent judgment in respect of a civil enforcement action initiated by the U.S. Securities and Exchange Commission whereby, among other things, he was enjoined from violating U.S. securities laws, required to pay in excess of US$4 million in disgorgement and prejudgment interest and prohibited from acting as a director or officer of certain types of issuers.

In July 2013, OSC Staff issued an Amended Statement of Allegations against the Respondents, seeking orders against them in reliance on the inter-jurisdictional enforcement provisions of the Ontario Securities Act (OSA).


In appropriate circumstances, subsection 127(10) of the OSA permits the OSC to issue orders against respondents in reliance on the orders and findings of courts and/or regulatory authorities in other provinces or countries without requiring further proof of the facts found in such other proceedings. In its reasons, the OSC emphasized the importance of its inter-jurisdictional enforcement power to efficient and effective securities regulation.  

Among other things, a foreign criminal conviction which arises from “a transaction, business or course of conduct related to securities or derivatives” permits the OSC to order sanctions under its public interest power. Further, the OSC held that the phrase “related to securities” should be given a wide interpretation and require only “some connection” between the foreign conviction and securities. While the mail fraud convictions against the Respondents in this case arose out of asset sales, the OSC indicated that the judgments regarding those convictions included findings that the Respondents had breached U.S. securities law disclosure requirements. Thus, the OSC held it had jurisdiction to impose sanctions on both the Respondents.

In addition, the OSC noted that it could order sanctions against Mr. Black because of the consent judgment he entered into with the U.S. Securities and Exchange Commission, as the OSA permits the OSC to make orders where a person or company has agreed to “sanctions, conditions, restrictions or requirements” with another securities or derivatives regulator.


In Black, the OSC reiterated that its public interest mandate is neither remedial nor punitive. Instead, it is protective and preventive, and is to be used to prevent future harm to Ontario’s capital markets.

After concluding that the Respondents were not denied due process or natural justice in the U.S. proceedings, the OSC found that sanctions were necessary to protect the integrity of Ontario’s capital markets. The OSC concluded that the misconduct underlying the convictions raised “fundamental issues of honesty and integrity” and was sufficiently abusive as to warrant apprehension of future conduct detrimental to Ontario’s capital markets. Further, the OSC stated that sanctions were appropriate and necessary to maintain the high standards of fitness and business conduct expected of market participants.

The OSC explained that an objective of sanctions is to restrain any apprehended future conduct that would be detrimental to the integrity of Ontario’s capital markets and not solely to avoid a repetition of the specific conduct underlying the convictions. Consequently, the OSC did not find the Respondents’ assertion that the specific conduct at issue was unlikely to recur to be a factor against imposing sanctions.

Further, the OSC declined to treat the fact that Respondents were found not guilty on other charges in the U.S. proceedings, such that the misconduct was isolated, as a mitigating factor in determining sanctions. The OSC also rejected the suggestion that the relatively small quantum of the non-competition payments in issue was a mitigating factor, stating that “[in] our view, there is no level of fraud that should not engage a consideration of appropriate sanctions.”

After consideration of the penalties already faced by the Respondents in the U.S., the OSC found that it was appropriate to “prohibit the Respondents from holding the positions of director or officer in circumstances where they could direct or influence the management of a business that is required to comply with the securities laws of Ontario.” Accordingly, the OSC issued orders banning the Respondents from becoming or acting as a director or officer of any issuer, registrant or investment fund manager (and to resign any such positions held), and from becoming or acting as a registrant, investment fund manager or promoter. The OSC made such bans permanent as it was not satisfied that the risk of future misconduct would decrease over time.

However, affirming that sanctions are not to be used to punish past misconduct, the OSC declined to issue a trading ban and other orders sought by OSC Staff because the misconduct of the Respondents in the U.S. did not relate to the trading or acquisition of securities.


Black demonstrates that the OSC takes a broad view of matters that engage its inter-jurisdictional enforcement power. The decision serves as a reminder to market participants in Ontario that the resolution of securities-related allegations outside of Ontario may not be the end of the story and may lead to further action by the OSC. The decision also illustrates that the OSC will scrutinize sanctions proposed by Staff to ensure that the sanctions conform to the nature of the conduct at issue as well as the limits of the OSC’s public interest power.