Banker Beware: Bank may be liable to third parties for its client’s fraud

David N. Vaillancourt
Affleck Greene McMurtry LLP June 13th, 2012

A bank may be liable to non-customers who are victims of a fraud carried out by a customer of the bank if the bank had constructive knowledge (but not actual knowledge) of the customer’s fraud, according to a recent decision by an Ontario court. In Pardhan v. Bank of Montreal, 2012 ONSC 2229, Justice Horkins certified a class action against the Bank of Montreal arising from a fraud perpetrated by a BMO client using BMO’s banking facilities. Salim Damji defrauded his victims of approximately 77 million dollars through a fraudulent investment scheme. Damji told his victims that he had developed [...] Full article

Denial of Mareva injunction due to Bank’s “dirty hands” upheld

Kyle J. Peterson
Affleck Greene McMurtry LLP May 28th, 2012

Advancing unfounded allegations of fraud and overstating its case may preclude a party from attaining equitable relief. A panel of the Ontario Divisional Court upheld Justice Stinson's dismissal of a motion to continue an interim Mareva injunction brought by the Royal Bank of Canada. Full article

Lenders not liable for failing funds

Kyle J. Peterson
Affleck Greene McMurtry LLP November 19th, 2006

If investors borrow money to invest in mutual funds, and the funds do not perform up to expectations, are the lending financial institutions on the hook? This question was the subject of the recent Court of Appeal decision in Baldwin et al. v. Daubrey et al. Full article