In his decision this Fall in Fraleigh v. RBC Dominion Securities, Ontario Superior Court Justice Newbould summarily dismissed an action brought by John Fraleigh against RBC Dominion Securities and one of its employees. The action was brought for allegedly false statements and testimony given before the Ontario Securities Commission claiming unusual trading activity in his RBC trading accounts – information that was later published in media reports. In dismissing Fraleigh’s action, Justice Newbould found that the claim arose entirely from testimony and other related communications to the OSC; communications that are protected by absolute privilege.

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While the corporate oppression remedy is a broad remedy that can provide relief to a wide range of shareholders and certain other stakeholders harmed when a corporation is run contrary to their reasonable expectations, it will not provide relief to arm’s length contracting parties who later find that their contract does not give them the protection they want.

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On September 19, 2008, the Supreme Court of Canada refused leave to appeal the approval of an all-encompassing restructuring plan for the Canadian market in Asset-Backed Commercial Paper and put an end to all legal challenges relating to what is now appearing to be merely the first Canadian chapter in a financial crisis that has since swept the globe.

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Two recent OSC decisions have sided against securities regulators on issues of documentary disclosure. In one case, an OSC panel found that there had been too much disclosure by OSC staff and, in another case, there had not been enough disclosure.

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There are few, if any, legal issues affecting the investment industry that are more cloudy and less certain than whether investment firm clients belong to the investment advisor or to the investment firm. And there are arguably few issues more important.  An investment firm’s financial bottom line is tied to the number of clients and [...]

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