protection legislation unveiled
By KAREN HOWLETT AND ELIZABETH CHURCH
With files from reporter Janet McFarland
Tuesday, Nov 23, 2004
The Ontario government unveiled long-awaited legislation yesterday that
will give investors more power to sue public companies and their directors
for disclosing false or misleading information.
"The people of Ontario have a vested interest in improved investor
protection," Gerry Phillips, management board chairman, said yesterday.
Current securities laws give investors the right to sue over misleading
statements in prospectuses, but information that drives most stock market
trading, such as quarterly earnings reports and news releases, is not
The new legislation would give investors the right to sue public companies
and key figures such as officers, directors and experts when false or
misleading information is included in materials such as annual or
quarterly statements. It would also cover information that is not
disclosed in a timely manner.
A group comprising some of Canada's largest pension funds has been urging
the government for some time to overhaul the province's securities laws by
arming investors with broader powers to sue companies.
The powerful Canadian Coalition for Good Governance has twice written to
government officials, urging the province to introduce such reforms. The
coalition includes major investors, such as the Ontario Teachers Pension
Plan and Jarislowsky Fraser Ltd.
Bob Bertram, executive vice-president of Teachers, said the new
legislation is welcome news for investors.
"I think the government is to be congratulated for moving ahead on this
issue. I think it's a very positive step for us," he said.
He added that it will be critical to review the details of the legislation
to see the proposed penalties and the kinds of defences available to
companies being sued to ensure the legislation is "fair and equitable" for
those who try to use it to seek redress.