When Investment Disputes Go To Court: Understanding Securities Litigation

Today’s topic: Financial litigation lawyers & their role in securities litigation.

The​‍​‌‍​‍‌​‍​‌‍​‍‌ financial markets in Toronto are quite complicated, very strictly regulated, and are the lifeblood of Canada’s economy.

Nevertheless, if there is a combination of large-scale investments and public trust, then disputes (which oftentimes allege corporate misconduct, misrepresentation, or even fraud) form the bitter side of the reality. 

Such conflicts, if they occur, may cause disastrous financial losses to investors, shareholders, and businesses. Therefore, there is a necessity of specialized legal intervention beyond the scope of typical commercial law.

You should not delay the demand for accurate, knowledgeable legal action. Securities litigation is the particular branch of civil law that deals with the issues arising from the trading of securities, the rights and duties of issuers and dealers, as well as the compliance with the securities regulations at the provincial and national levels. 

These litigations are different because they involve a huge amount of money, they depend on the use of complicated financial evidence, and require an understanding of the interplay between the courts and regulatory bodies like the Ontario Securities Commission (OSC) jurisdiction. 

It is only a law firm that has substantial experience in financial law, intricate forensic accounting and top-level litigation that can carry these issues forward or defend them ​‍​‌‍​‍‌​‍​‌‍​‍‌effectively.

In this blog, we will explain the following:

• Who are financial litigation lawyers?
• What makes securities disputes complex?
• How can financial litigation lawyers help?

Therefore, if these are a few things that you want to now, keep reading…

Who Are Financial Litigation Lawyers?

As​‍​‌‍​‍‌​‍​‌‍​‍‌ these litigation trends are influenced by global economic forces and new regulations, it is imperative for leaders in financial services operating worldwide to have a strategy in place for dealing with a wide variety of challenges.

Lowering the risk and expense of a lawsuit, especially in a time of disruption and change, requires having the right team of advisors. 

Financial litigation lawyers are exactly the people who can provide such assistance!

Financial litigation lawyers are the ones who have the knowledge and experience to deal with disputes in the banking, investment, and financial sectors. These disputes may arise from institutions or clients.

Furthermore, these cases can be quite complicated and involve the following:

• Fraud.
• Breaches.
• Regulatory issues.
• Debt recovery.
• Class actions.

They take the load off the client in the whole process, from pre-trial strategy and discovery through court trials and settlements.

On top of that, they deal with the most critical situations. And by that, they help the banks, investment firms, and consumers to smoothly sail through the maze of complex financial regulations and economic ​‍​‌‍​‍‌​‍​‌‍​‍‌intricacies.

The Defining Dynamics Of Securities Disputes

The matters handled under the umbrella of securities litigation are different. Additionally, they often require urgent action to preserve assets and evidence before further damage is incurred. Understanding the nature of the claim is the first step in building a successful defence or prosecution. 

Successfully prosecuting or defending a securities litigation case demands a unique blend of corporate finance knowledge, forensic accounting acumen, and advanced trial strategy.

Financial​‍​‌‍​‍‌​‍​‌‍​‍‌ litigation lawyers can do this very well. They can take a large volume of complicated financial data and expert testimony and create a single clear legal argument from it.

Irrespective of whether they represent institutional investors, private shareholders, or corporate defendants in the Ontario Superior Court of Justice, their job remains the same.

Common scenarios include:

Misrepresentation And Disclosure Failures:

It is alleged that a company or its directors misled (or failed to adequately disclose) the information in the prospectuses, continuous disclosure documents, or public statements, and as a result, institutional or private investors made wrong decisions.

Insider Trading And Market Abuse:

Cases originate from trading activities that are carried out on the basis of material non-public information and the primary purpose is to gain profits. Besides, in this situation, directors and officers can be made to pay heavy liabilities.

Shareholder Disputes And Remedies:

Disputes relating to corporate governance, directors’ duties, and shareholder rights, including extremely complex technical aspects of oppression remedies and derivative actions that are intended to get the company to take the required action, for instance, on behalf of the shareholders.

Investment Dealer Liability:

Claims against brokers or investment advisors for negligence, breach of fiduciary duty, or failure to ensure suitability when the investments sold were not appropriate for the client’s risk ​‍​‌‍​‍‌​‍​‌‍​‍‌profile.

How Can Financial Litigation Lawyers Help?

Here are some of the ways in which financial litigation lawyers can help you:

Strategic Case Management for Maximum Impact and Recovery

Firstly, the sheer number and complexity of these cases call for a legal approach that is not only carefully thought out. Rather, it should also be closely monitored and adjusted on time. This helps to deliver the most substantial and effective results from the very first day.

Forensic Investigation:

Secondly, there’s a forensic investigation. In addition to the usual document discovery, this step includes direct interaction with forensic accountants and financial experts to:

• Follow complex transactions.
• Accurately determine damages (which may sometimes require advanced economic modeling).
• Obtain physical proof of misconduct or falsification.

Class Action Management:

Thirdly, large-scale investor disputes are mostly structured as class actions. For instance, the team of financial litigation lawyers have the skills and knowledge to do the following:

• Obtain class certification.
• Communicate with classes of claimants.
• Settle multi-million-dollar class settlements under court supervision.

Regulatory Interaction:

Formal regulatory investigations usually accompany civil litigation. They can offer strategic advice. This ensures that actions and disclosures in one forum do not compromise the client’s position or increase their liability in another forum.

Damage Quantification:

Precisely determining the plaintiff’s financial loss is the most complicated. Additionally, it is the most important part of any securities claim. Therefore, expert economic analysis must support a finding of causation. It should also ensure that the calculated damages withstand judicial scrutiny.

Financial litigation lawyers aim to be a strong, knowledgeable voice in front of complex financial disputes. This way, ordinary people like us can ultimately safeguard our interests. Thereby, protecting against the corporate giants and the market’s intricacies.