Wednesday, April 23rd2.5°C
19345
20957

Supreme Court gives green light to class suit against fund managers

OTTAWA - The Supreme Court of Canada has agreed to allow a class action suit to go ahead against two mutual fund managers whose practices allegedly cost their investors millions of dollars.

In a 7-0 decision, the court upheld lower court rulings that said a class suit can proceed against AIC Ltd. and CI Mutual Funds Inc.

The firms were among five fund managers found by the Ontario Securities Commission in 2004 to have allowed market timing practices - quick in-and-out trading of fund units to exploit price discrepancies - which hurt their investors.

Market timing can hurt long-term investors in mutual funds by diluting a fund's assets, raising its costs and potentially forcing the manager to keep extra cash on hand.

Although the firms paid millions in a settlement with the securities regulator, some investors filed a class action suit seeking more money.

A motion judge denied the suit, but that was overturned by other courts and now the Supreme Court has agreed the suit can proceed.

Three of the five firms involved have already settled, leaving the suit to go ahead against AIC and CI.

Writing for the court, Justice Thomas Cromwell said the original judge was wrong to have barred the class action suit.

"I agree with the Divisional Court and the Court of Appeal that the motion judge erred in principle in his analysis and that this justified appellate intervention in his exercise of discretion to refuse certification," Cromwell wrote.

"As I see it, the correct legal principles support those courts’ decision to certify the proposed class action."

CI (TSX:CIX) noted the Supreme Court's decision only allows the class action to proceed.

"CI Investments intends to vigorously defend this action, in part, on the basis that to the extent that our funds' investors suffered any harm, they have been fully compensated as a result of the payments that CI Investments made to them eight years ago as a result of the Ontario Securities Commission proceeding," the fund manager said in a statement.

The Canadian Press


Read more Business News

21673


Recent Trending




Today's Market
S&P TSX14555.97+62.29
S&P CDNX1004.887.67
DJIA16514.3765.12
Nasdaq4161.458+39.912
S&P 5001879.55+7.66
CDN Dollar0.9062-0.0007
Gold1284.60+4.00
Oil102.15-2.22
Lumber336.70+1.40
Natural Gas4.735-0.004

 
Okanagan Companies
Pacific Safety0.105-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.21-0.06
Cantex0.05+0.005
Anavex Life Sciences0.385-0.005
Metalex Ventures0.080.00
Russel Metals31.17+0.47
Copper Mountain Mining2.380.00
Colorado Resources0.26+0.005
ReliaBrand Inc0.11+0.03
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.25+0.02

 



19052

FEATURED Property
19053307883 Pleasant Valley Road
2 bedrooms 1 baths
$299,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Learning to flirt with the edge

With all of the adventure activities I have done and still do, I wonder sometimes if the edge still exists. The systematic approach to learning a new adventure or extreme activity combined with the r...


Time spent prospecting

How much time should you put into prospecting? The question is a bit of a puzzle. Ideally, there would be a reference book that lists, by industry, how much time you should invest in prospecting acti...


Valuation fears grip markets

The Big Picture Valuation fears grip markets Growing concerns about the level of stock market valuations sparked a risk-off trade in global markets this week. Investors are worried that many companies...

_



21637

21637


Member of BC Press Council