Peter Howard floated the idea to the Ontario Securities Commission panel in his closing remarks on Tuesday, presenting it as an alternative to completely banning Black from participating in public companies.
What was less apparent was how the regulator would exercise its authority in such an instance.
The comments came as lawyers for both sides wrapped up arguments in a hearing to determine whether Black is to be banned from ever serving as a director or officer of a public company in the province.
Earlier this month Black, 70, testified that he had "absolutely no desire" in taking either of those roles, saying instead he was fighting regulators to protect his reputation as someone who is suitable for such roles.
However, closing remarks from his lawyer focused on whether it was even likely that Black would have the opportunity reoffend.
Howard told a provincial regulatory panel that Black would have to exercise "logical gymnastics" to reach the "infinitesimal possibility" of a scenario that would lead to his committing a fraud offence.
He walked through a string of unlikely steps from being elected as a director at a company to fumbled regulatory oversight before telling the panel that it was practically impossible.
"There is no reasonable likelihood of that sequence of events occurring," he said.
Lawyers for the OSC presented a very different characterization, saying the former Hollinger executive's fraud conviction in a U.S. trial should mean he's "out of the market" and unfit to serve as a company director or officer.
"The public, when making decisions to invest in companies in Ontario, should not have to gamble on whether or not the officers and directors of those companies will act honestly," OSC lawyer Anna Perschy argued.
"It is not too much to expect officers and directors not defraud the companies they manage," she added.
The regulator alleges Black, along with other directors and officers of Toronto-based Hollinger Inc. and Chicago-based Hollinger International, used non-competition payments to line their pockets with money that should have gone to the companies and their shareholders.
The payments were related to Hollinger International's sale of a group of small newspapers in the United States.
The OSC, which oversees Canada's largest stock market and many of its publicly traded companies, began its case against Black in 2005, but it was adjourned while he faced criminal charges in the United States. He served 37 months of a 42-month sentence in a Florida prison after being convicted of one count of fraud and one count of obstruction of justice, and was fined US$125,000.
As part of its case, the OSC has argued Black has the potential to commit further acts of fraud and that he doesn't show remorse for his past actions.
"This kind of abuse matters because it undermines the foundation of the proper function of our capital markets," Perschy said.
The OSC is seeking permanent bans for both Black and John Boultbee, Hollinger's former chief financial officer, arguing they wrongly took $600,000 from Hollinger in the form of non-compete payments and that they have not taken responsibility for their actions despite convictions in the United States.
Boultbee was convicted of one count of fraud in the U.S.
However, Black's lawyer argued "there can be no intellectually honest way to conclude that" Black could commit fraud again.
"(You'd have to) make the assumption that he is either bovinely obtuse or insane," Howard said.
"What person would do that?"
Black has always insisted that he didn't break the law, and was successful in having most of the U.S. charges against him dropped and most of the convictions overturned after a series of appeals.
Boultbee, who represented himself through a teleconference from British Columbia, said he takes issue with the OSC's characterization of him as treating his convictions as trivial.
"I have never ever made a public statement regarding the case against me, the conviction, or my conduct," he said.
"Trying to defend myself in a criminal case, and this case, is not trivializing anything. It's just exercising my right."
The OSC panel hearings will be adjourned until decision is made.
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