LITIGATION UNLEASHED - Stikeman Elliott

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THE
NEW STATUTORY CIVIL LIABILITY REGIME:
Who, when and how much?
2.1 Overview of the amendments
The following are brief descriptions of the most important aspects of the new liability regime,
which are also summarized in the charts contained in the Appendices.
2.1.1 Potential defendants
The individuals and companies that may be exposed to liability by the
amendments are described in the following chart (a fuller description is found
in the Appendices):
WHO?
Responsible Issuer
DESCRIPTION
A “reporting issuer” or any other publicly-traded issuer with a “real and substantial
connection to Ontario”, including a publicly-offered investment fund
Director
A director of either a “responsible issuer” or an “influential person”
Officer
An officer of either a “responsible issuer” or an “influential person”
Investment Fund Manager
Influential Person
Expert
Spokesperson
A “person who has the power and exercises the responsibility to direct the affairs of an
investment fund”. For the purpose of liability under the amendments, investment fund
managers are generally classed as “influential persons”
A “control person”, a “promoter”, an insider (who is not a director or senior officer of
a responsible issuer) or an investment fund manager (if the responsible issuer is an
investment fund)
A “person or company whose profession gives authority to a statement made in a
professional capacity by the person or company including, without limitation, an
accountant, actuary, appraiser, auditor, engineer, financial analyst, geologist or lawyer”
A person with “actual, implied or apparent authority to speak on behalf of a
responsible issuer” or “on behalf of an influential person”
2.1.2 Rights of action
The Securities Act currently provides a statutory cause of action only to investors who
purchase securities sold to them pursuant to a prospectus, offering memorandum or
securities exchange take-over bid circular (commonly known as the “primary market”).
The amendments will provide an additional statutory cause of action for investors who
purchase or sell securities from third parties in the market (commonly known as the
“secondary market”) by granting a right of action for:
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LITIGATION UNLEASHED
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