The Securities and Exchange Commission has reached a settlement with David Radler, once the publisher of the Chicago Sun-Times and a former business partner of Conrad Black, for his role in a scheme to loot money from Hollinger International.
Without admitting or denying the SEC charges, Radler agreed to pay about $23.7 million in disgorgement and prejudgment interest and a $5 million civil penalty, to be barred from serving as an officer or director of a public company, and not to violate certain provisions of the federal securities laws. The settlement is subject to court approval.
Separately, the Sun-Times Media Group (as Hollinger International is now known) reached its own settlement with Radler, including his wholly owned company North American Newspapers and the publishing companies Horizon Publishing and Bradford Publishing.
The Sun-Times company will receive $63.4 million to settle the company’s claims against Radler, Horizon, and Bradford; to settle potential additional claims against Radler related to a special committee’s recent findings regarding backdated stock options, and to satisfy Horizon’s and Bradford’s debts to the company. The $63.4 million includes the $28.7 million that Radler has agreed to pay to the SEC.
Linda Chatman Thomsen, director of the SEC’s Division of Enforcement, called the settlement one of the largest civil penalties in recent years against an individual wrongdoer.
The SEC had filed its fraud complaint against Black, Radler, and Hollinger Inc., the Toronto-based holding company that controlled Chicago-based Hollinger International, in November 2004. The commission alleged that from 1999 through 2003, Black, Radler, and Hollinger Inc. illegally diverted to themselves, other corporate insiders, and Hollinger Inc. roughly $85 million of the proceeds from Hollinger International’s sale of newspaper publications through purported “non-competition” payments.
As for Black’s criminal trial, in Chicago, opening arguments are scheduled for Tuesday. He is charged with 14 counts of racketeering, money laundering, obstruction of justice, mail fraud, wire fraud, and tax fraud, according to The New York Times. In September 2005, Radler reportedly pleaded guilty to one count of mail fraud and agreed to cooperate with prosecutors.