Secondary Market Liability in Canada: Securities Class Actions

This article was written by: Robb C Heintzman, Michael D Schafler and Soloman Lam.

The securities legislation of all Canadian provinces and territories now contain provisions that create civil liability for secondary market misrepresentation. Investors that purchase an issuer’s securities on the secondary market may therefore bring claims for misrepresentation or a failure to make timely disclosure of a material change. As a result, there has been a marked increase in the number of securities class actions in Canada.”

This article provides: an overview of the policy rationale behind the new statutory regime; an examination of the regime’s key features; and an analysis of the case law that has developed around the provisions so far.

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