Securities class action lawsuit filings in Canada hit record levels in 2011 according to a new report from NERA Economic Consulting. The January 31, 2012 report, entitled "Trends in Canadian Securities Class Actions: 2011 Update" (here) concludes that the persistent growth in Canadian securities class action lawsuit filings "is not a transient phenomenon."
According to the report, in 2011, there were 15 new securities class action lawsuit filing in 2011, more than in any previous year. The 2011 filings bring the total number of pending and unresolved Canadian securities class action lawsuit filings to 45.
The growth in securities lawsuit filings in Canada is largely a result of the growth in new filings under Bill 198, the Ontario legislation that amended the Ontario securities laws with regard to issuer's continuous disclosure obligations. The report notes that there have been a total 35 Bill 198 cases since the Act became effective at the end of 2005, including nine in 2011. The Bill 198 cases account for more than two-thirds of all of the suits filed between 2008 and 2011. The other claims filed in 2011 include, among other things, one prospectus claim; one related to a takeover bid; two related to investment fund management; and two related to Ponzi schemes.
Just as was the case with 2011 securities lawsuit filing in the U.S, a significant driver in the 2011 Canadian filings was the rise in filings against Chinese companies whose shares trade on North American exchanges. Among the highest profile case in Canada was the lawsuit involving Sino-Forest, whose shares trade on the Toronto stock exchange. (As noted here, U.S. investors recently have attempted to bring a class action in U.S. federal court against Sino Forest alleging violations of NY state law.) At least three of the other new 2011 filings involve Chinese companies.
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Read other items of interest from the world of directors & officers liability, with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.
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