Investment losses are an inevitable part of investing in the stock market. Investors assess the potential risk and reward of an investment in a public company based on publicly available information. However, they do not assume the risk of misleading financial statements, misrepresentations in MD&A, oppressive conduct by directors and officers, insider trading, market manipulation, and professional negligence involving a company’s auditors or professional advisors. Corporate and securities laws are designed to protect investors from losses arising from such misconduct.
Regulators like the OSC and IIROC have limited resources – they simply cannot investigate and prosecute all instances of securities fraud and market manipulation and it is not their mandate to seek compensation for investor losses. As a result, individual investors often assume there is nothing that can be done when their losses are small compared to what it would cost them to hire a lawyer to pursue a legal action.
An investor class action can be a powerful litigation strategy to recover your investment losses. By aggregating individual investment losses, an investor class action provides strength in numbers giving ordinary investors a means of collectively enforcing their rights and fighting injustice in the stock market and the corporate boardroom.
An investor class action should also be an important consideration for institutional investors that purport to take corporate governance and ethics seriously. By taking a lead role in investor class actions, pension and hedge funds can reaffirm their principles of responsible investment and send a strong message to public companies, their directors and officers, and other market players that misleading disclosure and corporate misconduct will not be tolerated. In turn, they will encourage greater transparency and accountability and better protect their clients’ interests.
Investigation Counsel can provide knowledgeable, timely guidance and representation in investor class actions and assist in the recovery of investment losses. We welcome your inquiries.