Prepare for an increase in securities class actionsResponsible issuers, directors, officers, and experts in Ontario now face a brave new regulatory world |
Traditionally, Canadian shareholders had little legal recourse against public issuers who failed to disclose a material change or issued false financial statements. Unless fraudulent misrepresentation could be demonstrated, secondary market participants had no alternative civil remedy. However, Ontario Securities Act amendments — in force as of December 31, 2005 — now give secondary market investors the right to sue issuers or others responsible for publicly releasing oral or written communications.
The wider scope of liability in these amendments contained in Bill 198: Civil Liability for Secondary Market Disclosure enlarges potential civil claimants and their defendants in Canada. Lawyers who participate in securities class action litigation must be prepared for the coming surge.
In this article, Eric Khan, national director of Deloitte’s Class Action Administration practice, examines the recent amendments, select Canadian cases, and how cross-border participants may be impacted by the new regulations. Public issuers and counsel may benefit from identifying class action specialists early to provide assistance throughout the litigation process.
Download the article Surge in securities class actions inevitable? Be prepared.
Surge in securities class actions inevitable? Be prepared.
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