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Trends In Canadian Securities Class Actions: 2011 Update

1 February 2012
By Bradley Heys and Mark Berenblut

Securities class action filings in Canada reached their highest level to date in 2011, with 15 new filings, according to this newly released edition of NERA's study,  Trends In Canadian Securities Class Actions: 2011 Update. The previous high was 12 filings in 2008.

The study's co-authors, Vice President Bradley A. Heys and Senior Vice President Mark L. Berenblut, report that driving this increase in filings are so called "Bill 198" cases, which are those involving claims in respect of an issuer's continuous disclosure obligations pursuant to PartXXIII.1 of the Ontario Securities Act (OSA) and analogous sections of the other provincial securities acts. Nine of the 15 cases filed in 2011 were Bill 198 cases, compared to the seven filed in 2010.

The study also notes that three of the new filings during 2011 were made against Chinese companies whose shares trade on the TSX or TSX Venture Exchange. These filings are a reflection of one of the major trends driving class action filings in the United States last year. The filings in Canada include the case against Sino-Forest -- one of the highest-profile suits brought against Chinese companies on either side of the border. There are 45 active Canadian securities class actions as of 31 December 2011. These cases represent a total of approximately CAN$24.5 billion in outstanding claims.

NERA has been analyzing trends in securities class actions for more than 15 years. In addition to this Canada Trends report, the firm produces two US Trends studies annually, and reports for the UK, Australia, Japan, and Italy.