${site.data.firmName}${SEMFirmNameAlt}
In Association With Lieff, Cabraser, Heimann, & Bernstein, LLP

Local: 416-548-9874

Toll Free: 1-800-462-3864

Will a parallel regulatory action affect a pending class action?

When it comes to a proposed class action lawsuit, plaintiff lawyers who are bringing the action must ensure that the class gets certified by the court, otherwise it cannot proceed. A lot of things can come up during the preliminary phases of a proposed class action to prevent it from getting certified, so it is absolutely vital that plaintiff lawyers handle this phase strategically.

One issue that may come up while certifying a class action relates to parallel regulatory actions. For example, if a parallel regulatory action addresses the same issue as the class action and the matter was settled by the regulator and the defendant with financial compensation going to the plaintiffs -- will it prevent the class from getting certified?

Fischer v IG Investment Management Ltd (a case handled by our law firm, Rochon Genova, LLP) is an excellent example of this kind of scenario -- and it was an excellent win for the plaintiffs we represented. In Fischer, the Ontario Court of Appeal decided that a financial services firm targeted in a regulatory action will still be liable in class-action lawsuits -- if the firm reaches a settlement with the Ontario Securities Commission for an amount that is less than investor damages.

As a result of the court's ruling, the Fischer class was certified, and investors were permitted to pursue their class action against five mutual fund managers relating to the 2004 market-timing scandal. The class was certified even though defendants had already settled with the Ontario Securities Commission in a parallel regulatory action that addressed the exact same scandal.

Lawyer Joel Rochon, from our Toronto-based law firm, Rochon Genova, LLP, represented the plaintiffs in this case. He succinctly described the judge's decision in an interview, saying that it offered much-needed and crisp guidance to lawyers, judges and corporations regarding the crucial role that class actions play toward the promotion of justice in securities cases.

If it were not for the certification of this securities class action, the case against mutual fund managers AIC Ltd. and CI Mutual Funds Inc. would not have proceeded to trial, justice would not have been served, and the plaintiffs would have been left in a lurch. Furthermore, future plaintiffs in other types of securities class actions (where a parallel regulatory settlement has occurred) might also have been prohibited from pursuing justice regarding financial damages caused by securities law violations.

Source: Financial Post, "Class-action ruling shocks Bay Street," Julius Melnitzer, accessed Nov. 06, 2015

No Comments

Leave a comment
Comment Information

Ask Our Lawyers

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Rochon Genova LLP
121 Richmond Street West, Suite 900
Toronto, ON M5H 2K1

Phone: 416-548-9874
Toll Free: 1-800-462-3864
Fax: 416-363-0263
Toronto Law Office Map

map