Black may lose more than his freedom

A CNN report commenting on the six and a half years handed down to Black for stealing $6.1m from his company and obstructing justice by lugging some boxes out of his Toronto office says the answer came from prosecutors in the trial – greed and arrogance. Black (63), who continues to profess his innocence, was sentenced by Judge Amy St Eve in a Chicago court under guidelines that could have seen him serve up to eight years. He will also pay a fine of $125 000. Even the judge allowed one personal observation to Black: ‘I frankly cannot understand how somebody of your stature… could engage in the conduct that you engaged in, and put everything at risk, including your reputation and your integrity.’ Black didn\'t have an answer for her, at least directly, although he did tell the court that he had ‘very profound regret’ over what the financial scandal at his former company, Hollinger International, had done to that company\'s shareholders and employees, and also the effect it had on members of his own family. Full CNN report

Black is also at risk of losing his peerage. A Bill has been proposed in the UK, says The Times, that will strip anyone convicted of a crime of their peerage. Jack Straw, the Justice Secretary, said that the UK Government was committed to bringing in a Bill that would ban convicted criminals from sitting in the House of Lords. Straw said that the sooner the legislation was put on the statute book the better. He was speaking after Labour MPs questioned why Lord Black should remain in the Lords. At present MPs who are convicted of a criminal offence are immediately banned from the Commons. But peers are allowed to keep their seat, regardless of the severity of their crime. Full report in The Times

Black plans to appeal, but according to a CTV report, experts say that although his lawyers will raise some valid points his chances of winning are fairly slim. ‘His appeal is a good one but it\'s not that good,’ said James Morton, president of the Ontario Bar Association. ‘I wouldn\'t put it higher than 20-25%.’ Black is required to report to the low-security Federal Prison Camp in Eglin, Florida, on 3 March to begin serving his sentence. His lawyers have 10 calendar days to launch the appeal, which experts predict will largely focus on the instructions that were given to the jury before the verdict. Black\'s lawyers have argued that the so-called ‘ostrich instruction,’ which suggests a defendant can be found guilty of a crime by conscious avoidance – or sticking his head in the sand while illegal activity is clearly taking place – was unfair. Full CTV report

The sentence handed down to Black appears tough, but there are signs that the American legal system is loosening its grip on other corporate wrongdoing. That, says The Economist, was the message of the annual General Counsel Roundtable, hosted by The Economist and Corporate Board Member magazine. ‘For several years after Enron collapsed, life was very nearly impossible for corporate defendants, but in the past two years the pendulum has swung dramatically in their favour,’ argued one of America’s top corporate lawyers. The pendulum has swung for several reasons, the lawyer argued. First, the sharp rise in the Dow Jones Industrial Average had dulled some of the anger that was directed at corporate America post-Enron, whose collapse coincided with the bursting of the late 1990s stock-market bubble. Second, despite widespread unpopularity among business executives and serious questions about its efficacy, the Sarbanes-Oxley Act has helped to reassure the public that there is less bad behaviour taking place in the boardroom. Third, regulators are under growing pressure to return some of the power they grabbed after Enron’s collapse. The Securities and Exchange Commission took a relatively light approach to prosecuting offenders in the options-backdating scandal. Congress seems likely to approve a legal change that restores the ability of firms to enjoy attorney-client privilege without that being regarded as a lack of co-operation with the authorities. Full report in The Economist