The Ontario Securities Commission has again, for the sixth occasion, delayed its proceedings against Conrad Black. This time, the hearing that was to have commenced on January 8th has been rescheduled for the end of March, the same month that Mr. Black has a rather pressing appointment elsewhere, like with the U.S. Bureau of Prisons to begin serving his 78-month sentence. Perhaps its willingness to regularly postpone is part of what OSC chairman David Wilson had in mind when he said that “there’s a lot more room for compassion and understanding” in Canada’s treatment of white collar crime. If SEC chairman Christopher Cox had made a statement like that, the chorus of outrage from Capitol Hill would be deafening, as would the demands for his resignation. In Canada, it produced not even an audible note from the political arena. The difference speaks volumes and does much to explain the prevalence of what we have described on these pages before as Canada’s clueless corporate crime cops.
This is the same OSC which, after prosecuting Bre-X’s John Felderhoff for more than six years, came up empty-handed. This is the same OSC that is still trying to marshal a case against Livent founders Garth Drabinsky and Myron Gottlieb more than six years after commencing proceedings against them. This is the same OSC that has still not found, much less prosecuted, a single case of stock option backdating, even though companies, like Research In Motion, have admitted engaging in such activities while giving investors a totally different story when they were doing it.
So, in more time than it took for the U.S. justice department to indict, try and convict Conrad M. Black, the OSC has still not held a single day of hearings into the merits of the case it brought against him, and other Hollinger executives, in March of 2005. And David Radler, Hollinger’s number two man, has not only pleaded guilty and been sentenced to 29 months in a U.S. federal prison, but has also paid $28.7 million to settle charges brought by the SEC. He has not settled anything with the OSC. With a track record like this regulator’s it’s not hard to see why.
When executives pull a fast one in Canada and produce a misleading prospectus, the investing public often looks to the OSC for action. But what happens when the OSC itself fails to act as advertised? Where do Canada’s shareholders go for answers then?