Sometimes managers and/or directors will betray the trust bestowed on them by shareholders. One of the most egregious examples of this occurrence took place with Conrad Black of Sun-Times Media group.
Conrad Black owned a controlling stake and was Chairman and CEO of Hollinger International (now known as Sun-Times Media Group (SUTM)), which owns several newspapers throughout the United States including the Chicago Sun-Times. Last year, he was convicted of fraud and sentenced to 6.5 years in prison.
In a recent twist, he’s decided to apply for a Presidential Pardon. The US President can pardon or commute the sentence of anyone convicted of a federal crime. (Outside of death penalty cases, does the country really benefit from the existence of this executive pardon privilege accorded to the President?) The incredible part in this story, however, is that the company Black stole from has to foot his legal bills, including those for this pardon attempt! Here’s a line from the annual report of Sun-Times Media:
“In connection with future legal bills, the Company agreed to advance 75% of the legal fees of attorneys representing Black.”
Needless to say, this company does not appear to be worth investing in.