Securities Litigation

Blakes has one of the most robust securities class-action defence practices in Canada. Our lawyers have experience representing issuers, financial institutions, auditors, underwriters, fund managers, dealers, directors and executive officers at all levels of court. Our emphasis on fresh thinking and creative solutions has allowed us to set important precedents in this rapidly developing area, including before the Supreme Court of Canada.

Our national team takes a comprehensive approach. We advise clients about securities class-action litigation readiness and avoidance, risk management and insurance, and internal investigations, all factors that can help to reduce class-action exposure before claims materialize. When claims do arise, we engage in thorough planning with our clients to develop a strategy that is aligned with their business objectives and tolerance for risk. 

Securities class-action litigation often arises within a broader nexus of legal activity that can include insolvency and regulatory proceedings, transactions, and insurance and employment disputes, often across multiple jurisdictions. Our sophisticated cross-disciplinary teams are adept at managing this complexity. Lawyers in diverse practice areas in our offices across the country coordinate seamlessly to deliver integrated solutions. We have strong relationships with top U.S. and international firms and regularly coordinate with them to deliver global resolutions.

Blakes has one of the largest and most active mergers and acquisitions practices in Canada. An important aspect of our M&A practice is the support provided by the Firm’s securities litigators who work with clients and the transactional team from the earliest stages of an M&A deal to identify and address potential litigation issues.
 
Blakes securities litigators have extensive experience in handling hostile take-over litigation before the courts and provincial securities commissions and in going-private transactions, opposed arrangement transactions, and dissent and appraisal proceedings. Whether we are advising the company, the board of directors, a special committee or a related third party such as an investment banker, Blakes litigators understand the role that litigation can play in shaping the outcome of a contested M&A transaction.

Our Securities Litigation group also has significant experience handling associated class actions involving claims for breach of fiduciary duty and oppression. Blakes also represents vendors or sellers post-closing in disputes involving alleged breaches of representations and warranties in asset or share purchase agreements.

 

Directors and officers of Canadian corporations may face personal liability and even regulatory or criminal prosecution for actions taken or decisions made in the course of their duties in a wide and evolving range of circumstances. Fortunately, corporations can indemnify directors and officers for most exposures they may face, provided they have not engaged in intentional misconduct.
 
Blakes has extensive experience acting in disputes across the country in which directors’ and officers’ personal liability is at issue. These include securities class actions, oppression claims, derivative actions, indemnification disputes and insolvency proceedings. We also provide advice to corporate clients and individual directors and officers about indemnity agreements, directors’ and officers’ liability insurance coverage and governance practices.

 

• Celestica Inc. in its successful appeal before the Supreme Court of Canada to uphold the limitation period for bringing a statutory secondary market securities class action in Trustees of the Millwright Regional Council of Ontario Pension Trust Fund v. Celestica Inc. et al. The decision makes several important observations relating to the interplay between the Ontario Securities Act and the Class Proceedings Act.

• BDO LLP in successfully defeating certification of a proposed investment fund class action. Whitehouse v. BDO represents an important development in the law regarding auditors’ duties of care to investors (subject to appeal). Blakes also represented BDO LLP in related enforcement proceedings.

• The lead underwriters in securities class actions in Ontario and Quebec against HEXO Corp., a cannabis producer. The plaintiff alleges that HEXO made material misrepresentations in its primary and secondary market disclosures.

• A major Canadian financial institution in a proposed class action alleging that mutual fund trustees and managers improperly paid a portion of the commissions collected on mutual funds to “order-execution only” brokers, while those brokers did not provide any advice or services to investors, in contrast to full service brokerages.

• The Stars Group Inc. (“TSGI”) in successfully defending an urgent proceeding brought by certain investment funds to prevent the conversion of convertible preferred shares in the capital of TSGI into common shares worth more than $2.3 billion.

• Horizons ETFs Management (Canada) Inc. in defending a securities class action seeking damages for the decrease in value of units of Horizons’ BetaPro S&P 500 VIX Short-Term Futures Daily Inverse ETF. 

• KPMG in its role as auditor to CannTrust in proposed securities class action involving claims that misrepresentations with respect to unlicensed growing and storage of cannabis caused resulted in shareholder losses.

• Olympia Trust Company in seven class actions against real estate development and financing companies and other related parties in respect of syndicated mortgage investments in different real estate development projects in Ontario and Alberta. Blakes succeeded in having certification dismissed in one of the actions, which dismissal was upheld on appeal. The other actions are at the pleading stage.

• A major Canadian financial institution in a proposed class action brought in British Columbia, alleging that managers of a mutual fund, contrary to disclosures in fund documents, followed a “closet indexing” investment strategy that simply replicated the fund’s benchmark index.

• The six largest Canadian accounting firms in connection with submissions to the Ontario Law Commission on Class Action Reform and subsequent submissions to the Standing Committee of the Ontario Legislature on Justice Policy in connection with Bill 161, which implements changes to Ontario’s class action regime.

• Bank of America/Merrill Lynch entities in two related class actions brought in the Ontario Superior Court and the Federal Court involving allegations regarding the manipulation of the market for SSA Bonds. The matter was settled on favourable terms.

• Bank of Nova Scotia in a series of proposed class action proceedings filed in Quebec and Ontario relating to alleged market manipulation pertaining to benchmarks affecting gold and silver markets.

• Hudson’s Bay Company (“HBC”) and the Special Committee of independent directors of HBC in  a proceeding before the Ontario Securities Commission relating to its proposal for the privatization of the Company.

• A discount brokerage in proposed class actions in Ontario and B.C. alleging that order-execution-only brokerages improperly collected trailing commission fees on mutual fund sales without providing any advice or services to investors, in contrast to full-service brokerages.

• A former officer of an Alberta corporation in a national class action involving allegations of primary and secondary market misrepresentation.

• A mutual fund trustee in the defence of a class action in Quebec based on allegations of misappropriation of funds and securities fraud.

• A Special Committee of the Board of an Ontario public issuer, in conducting an internal investigation into issues of compensation, conflicts of interest, and breach of fiduciary duty by senior management.

• An international investment bank in an OSC regulatory investigation, probing alleged negligence regarding securities offerings of an Ontario public issuer.