Alberta Court Finds that Administrative Penalty Survives Bankruptcy: The Sequel

By Steven Leitl and Aaron Stephenson on March 4, 2021 Posted in Other developments

In February 2020, we blogged about a then recent decision by Romaine J. of the Court of Queen’s Bench of Alberta relating to the interplay between the personal bankruptcy regime and administrative penalties. In Alberta Securities Commission v Hennig, 2020 ABQB 48 (Hennig), the Alberta Securities Commission (ASC) levied an administrative penalty against an individual who, among other things, was responsible for misrepresentations in a public company’s financial statements. That individual then made an assignment in bankruptcy and ultimately sought his discharge. Romaine J. ruled that the administrative penalty was imposed as a consequence of … Continue Reading

When you know, you know: Kaynes v BP p.l.c, 2021 ONCA 36 confirms how discoverability operates in fraudulent misrepresentation claims

By Linda Fuerst and Justine Smith on March 2, 2021 Posted in Class actions, Limitation Periods

In Kaynes v BP p.l.c, 2021 ONCA 36, the Ontario Court of Appeal clarified when a claim for fraudulent misrepresentation is discoverable under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (Limitations Act), and in what circumstances it is appropriate for a limitation issue to be decided on a Rule. 21.01(1)(a) motion.

Facts:

The Deepwater Horizon incident occurred on April 20, 2010. In November 2012, the appellant, who had purchased shares of BP in 2008, commenced a putative class action in Ontario based on a decline in the value of his shares following the incident … Continue Reading

UK Supreme Court overturns controversial decision on extraterritorial effect of Section 2 Notices | Financial services: Regulation tomorrow

By Linda Fuerst on February 12, 2021 Posted in Cross border issues

We invite you to review an article published by our colleagues in the United Kingdom regarding the UK Supreme Court’s recent decision regarding the extra-territoriality of the Serious Fraud Office’s power to obtain documents.

UK Supreme Court overturns controversial decision on extraterritorial effect of Section 2 Notices | Financial services: Regulation tomorrow… Continue Reading

The Courts’ Expectations of the Parties to a Lavallée Protocol when Technological Documents are Seized

By Sophie Melchers on February 12, 2021 Posted in Other developments, Uncategorized

In 2002, the Supreme Court of Canada developed a protocol to be applied whenever a search warrant was executed and some of the documents seized could potentially contain privileged information, in the case of Lavallee, Rackel & Heintz v. Canada (Attorney General), 2002 SCC 61, known as the Lavallée Protocol. As since adapted in Quebec, it essentially allows the target of a search warrant to assert privilege over all or part of the documents seized, which triggers the appointment of an amicus curiae (Latin for “friend of the court”) whose responsibility is to review all potentially privileged documents to … Continue Reading

Update regarding the Good Faith and Best Interests Requirements of the Test for Leave to Commence Derivative Actions

By Steven Leitl, Aaron Stephenson and Preston Brasch on January 26, 2021 Posted in Civil claims

On December 2, 2020, we blogged about the release of a British Columbia Court of Appeal decision affirming a denial of leave for 2538520 Ontario Ltd. (253) to bring a derivative action on behalf of Eastern Platinum Limited (EPL) against various of EPL’s directors and officers: 2538520 Ontario Ltd. v Eastern Platinum Limited, 2020 BCCA 313 (Eastern Platinum). That blog post is linked here.

Eastern Platinum is an important case because it clarifies that an application for leave to bring a derivative action may be denied if there is reason to believe … Continue Reading

The Obligation to Disclose Documents in the Possession of Third Parties: IIROC v. Crandall

By Ted Brook on January 19, 2021 Posted in Securities regulatory decisions

In IIROC v. Crandall, 2020 NBCA 76 (Crandall), the New Brunswick Court of Appeal overturned a 2019 decision of the Financial and Consumer Services Tribunal (the Tribunal) in which the Tribunal found that the Investment Industry Regulatory Organization of Canada (IIROC) had breached its duty of fairness owed to one of its members by failing to disclose documents in the possession of the member’s former employer during enforcement proceedings.

The Court of Appeal’s decision is significant for two reasons. First, the decision establishes that the obligation of regulators to produce documents in the possession … Continue Reading

British Columbia (Securities Commission) v. BridgeMark Financial Corp.: The Open Court Principle Applies in Hearings of Securities Regulators

By Linda Fuerst and Justine Smith on January 18, 2021 Posted in Class actions

In British Columbia (Securities Commission) v. BridgeMark Financial Corp, 2020 BCCA 301, the British Columbia Court of Appeal upheld a decision of the British Columbia Securities Commission (Commission) to release documents obtained during an investigation and filed as evidence at a hearing to consider whether to extend a temporary cease trade order. A firm of class action lawyers (the Law Firm) requested access to the evidence for use in a class action against the subjects of the investigation. The persons subject to the investigation appealed the Commission’s decision to grant access to the Law Firm.… Continue Reading

Lathigee v British Columbia Securities Commission: You Can Run, But You May Not be Able to Hide from A Disgorgement Order By a Canadian Securities Regulator

By Geoff Mens on December 30, 2020 Posted in Cross border issues

In a recent decision of the Supreme Court of the State of Nevada (Court), the Court upheld an order made by the Nevada District Court recognizing and enforcing a judgment of the British Columbia Supreme Court arising out of enforcement proceedings by the British Columbia Securities Commission (BCSC) against Michael Lathigee (Lathigee).

After a contested hearing, the BCSC found that Lathigee had perpetrated a fraud under section 57(b) of the B.C. Securities Act, and ordered sanctions including pursuant to section 161(1)(g) that he disgorge $21.7 million in ill gotten gains. The BCSC registered … Continue Reading

BC Court of Appeal Clarifies the Good Faith and Best Interests Requirements of the Test for Leave to Commence Derivative Actions

By Steven Leitl, Aaron Stephenson and Preston Brasch on December 2, 2020 Posted in Civil claims

In a recent split decision, a panel of the B.C. Court of Appeal (BCCA) considered the good faith and best interests requirements of the test for leave to commence a derivative action: 2538520 Ontario Ltd. v. Eastern Platinum Limited, 2020 BCCA 313.

A derivative action is a procedure pursuant to which a shareholder or other “complainant” may commence and control litigation in the name of a corporation that declined to commence its own litigation in respect of a wrong allegedly done to it. Derivative actions are most frequently brought by shareholders to redress alleged wrongs perpetrated by … Continue Reading

IIROC Panel Rejects Majority of Respondent’s Affidavits at Sanctions Hearing

By Anisha Visvanatha on November 27, 2020 Posted in Securities regulatory decisions

At a sanctions hearing in Re Eley, a Hearing Panel of the Investment Industry Regulatory Organization of Canada (“IIROC”) (the “Panel”) disallowed evidence submitted by the respondent, Douglas Eley, that was found to amount to “a thinly disguised attempt to re-open the Panel’s findings on the merits” rather than evidence relevant to sanctions (the “Sanctions Decision”).

The Merit Decision

Following a contested hearing, the Panel released a decision (the “Merits Decision”) in which it found that Mr. Eley had altered previously signed client documents, “seriously violating industry regulations” and his firm’s policies. … Continue Reading