In a pair of decisions released the same day, Justice Katherine van Rensburg of the Ontario Superior Court of Justice became the first judge to consider the statutory remedy created under section 138.3 of the Ontario Securities Act (the “Act”) for shareholders of public companies who suffer damages from public company misrepresentations on the secondary securities market in documents such as annual financial statements and other public documents.

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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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In its decision earlier this year in UBS Securities Canada, Inc. v. Sands Brothers Canada, Ltd., the Ontario Court of Appeal examined the extent to which industry custom and common practice may be utilized in determining whether a contract has been formed between two parties. In particular, the investment industry practice of conducting multi-million dollar deals over the telephone was cited by the Court in finding that a binding agreement for the purchase and sale of shares had been concluded between the parties to this litigation and in ordering specific performance of that agreement.

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The Ontario Court of Appeal has restored an earlier Ontario Securities Commission ruling, which held that the Investment Dealers Association of Canada (now known as the Investment Industry Regulatory Organization of Canada, or IIROC) retains the authority to discipline a former member for up to five years after that member has left the organization. The ruling also opens the door to IIROC and other SROs levying court-enforceable fines against former members.

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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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