An Ontario court is upholding certification of a class action alleging a respected industry player may not have done enough to protect investors against a scam -- the move suggesting the courts are increasingly sympathetic to investor pleas.
Ontario’s Superior Court has now denied a motion from CWT asking it to throw out a class-action suit already certified and alleging investors were not sufficiently protected against scams aimed at attracting their retirement savings over a period of four year ending June 2001.
Those allegations, also naming other defendants, have yet to be proven.
Still, this most recent decision confirms that there is, indeed, a basis for certifying the group. It points to the due-diligence requirements of the trust company among other determinants.
The case has been largely applauded by investor advocates across the country, and could ultimately strengthen the appeal of independent advisors as retail investors look for opportunities outside of traditional corporate structures.
But the case is also highlighting other important responsibilities for all advisors, especially around their response to regulator warnings about questionable industry players.