Correcting Corrections: Resolving Confusion Over the Public Correction Requirement in the Ontario Securities Act
(2019) 62:3 Can Bus LJ 310
27 Pages Posted: 10 Sep 2020
Date Written: July 1, 2020
To bring a class action under Part XXIII.1 of Ontario’s Securities Act (civil liability for secondary market disclosure), plaintiffs must show that there was a public correction. Two judges have split on what this means in practice. Justice Perell has interpreted the requirement broadly, as calling for both semantic and statistical evidence to establish the claim. Justice Belobaba has interpreted the requirement narrowly, as calling for limited semantic analysis and, generally, no statistical evidence. This article seeks to reconcile these two approaches. It argues that the best interpretation of the language of both judges’ decisions points towards the limited approach. It further argues that the limited approach is more consistent with legislative intent, avoids procedural confusion, and produces the best incentives for all capital market participants. In coming to these conclusions, this article also explains how the statutory language relating to public correction can be applied in the context of multiple partial corrections. This feeds into the conclusion, which provides some brief guidance to litigants on pleading, particulars, evidence, and calculating damages in Part XXIII.1 cases.
Keywords: Securities, Misrepresentation, Class Actions, Public Corrections
JEL Classification: K22, K41
Suggested Citation: Suggested Citation