CLASS PROCEEDINGS FOR PROSPECTUS MISREPRESENTATIONS

Abstract

The securities acts of virtually all provinces contain provisions allowing investors to bring civil actions for misrepresentations in prospectuses. The statutory provisions are significantly more advantageous to plaintiffs than common law remedies. At least theoretically, the increased possibility of civil liability for misrepresentation fosters compliance with the fundamental securities law requirement of "full, true and plain disclosure of all material facts ". However, the practicality of statutory civil actions for prospectus misrepresentation is doubtful without effective class action procedures. Ontario, Canada's largest provincial capital market, has recently enacted new class action procedures which may breathe new life into what has been a moribund statutory remedy. This article explores how statutory civil actions might be brought under the new class action legislation and discusses the significant practical constraints which continue to exist.