November 14, 2017
The Financial Post has referenced Torys bulletin “Securities Class Actions – Underwriter Duty of Care: LBP Holdings v. Hycroft Mining” in its story on the same topic.
The November 11 article talks about the Ontario Court of Justice ruling that now makes it more difficult for investors to sue underwriters. The ruling is also the first reported Canadian case on the issue of whether underwriters owe investors who buy securities under a prospectus a common law duty of care. Ultimately the decision held that underwriters do not owe a general duty of care, either to perform due diligence or to properly price shares.
An excerpt from the Financial Post story is below:
Another law firm, Torys, which represented the underwriters, also issued a report. It said the court declined to certify the class action brought against the underwriters "on the basis the common law claim of negligence failed to disclose a cause of action and a class proceeding was not the preferable procedure." (Instead, the preferred procedure, Justice Perell said, was for each of the investors to make individual claims in part because the average investment was almost US$310,000.)