Securities Class Actions

Companies that invite investment have a responsibility to uphold standards of fair and ethical dealing. Ontario's Securities Act imposes such obligations, as do other laws and regulations.

If you suffer negative financial consequences because a company does not meet its legal obligations, you have the option to pursue a lawsuit. If many people share your claim, you can start a class action proceeding.

Stevenson Whelton MacDonald & Swan LLP is based in Toronto and Vaughan, Ontario. Our focus is on litigation with a particular emphasis on complex claims, both civil and commercial. Members of our legal team have appeared before the Supreme Court of Canada and have been designated by the Law Society of Upper Canada as specialists in civil litigation.

Basis of a Securities Class Action Lawsuit

Most securities class actions are based on negligent misrepresentation. What is negligent misrepresentation? It lies somewhere between being careless with the truth and making an outright lie.

It's a fine legal line: Fraudulent representation requires reckless disregard as to the truth of something, while negligent misrepresentation only requires no reasonable ground to assume something is true.

You can claim negligent misrepresentation if a person:

  • Made a false representation as to a past or present fact, e.g., "These securities have always done well," when the speaker does not actually know if this is true. Statements about the future do not count, nor do mere opinions.
  • Had no reasonable ground to believe that the incorrect thing he or she said was true. In other words, if a person makes a false statement that he or she has reason to believe is true, he or she is not at fault.
  • Made an incorrect statement to induce you to make a decision
  • Convinced you of the misrepresentation, and you reasonably relied on it to your detriment in deciding to go ahead with the transaction
  • Caused you to suffer damages as a result of your reliance on the misrepresentation. You must be harmed by the transaction, or there is no liability.

In a prospectus, brochure or other promotional materials, companies may misrepresent the status of a project or manipulate share prices for their own benefit. For a class action to proceed, a court must certify that those who have suffered harm form a common class. This means their individual cases are similar enough to be adequately represented by one or two members of a class.

In the case of a securities class action, it is typically necessary to show that all members of a class relied on the same misrepresentation. However, it is possible to divide a class into sub-classes of those who relied on different misrepresentations made by the defendant.

Overcoming the certification hurdle is critical to any successful class action proceeding. Stevenson Whelton MacDonald & Swan LLP counsel have a long history of class action work in Ontario, including securities and Competition Act claims, with the experience and manpower required to pursue a case to a successful conclusion.

Canadian Securities Lawsuits Lawyers

To learn more about our work or to schedule a consultation with a lawyer concerning a possible or ongoing security class action, contact us at 416‑599‑7900 in Toronto or reach us online.