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$6.5 billion Sino-Forest class action suit launched
Court Watch |
2011/08/31 09:38
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Lawyers representing plaintiffs in a proposed class-action lawsuit against Sino-Forest Corp. (TSX:TRE) have filed a statement of claim against the Chinese timber operator, seeking more than $7.37 billion in damages.
Law firms Koskie Minsky LLP and Siskinds LLP filed the claim in Ontario superior court, alleging that executives conspired to inflate share prices, and accusing the troubled forestry company of making misrepresentations about its operations.
The Ontario Securities Commission halted trading of shares in the forestry company on the Toronto Stock Exchange last week, after accusing it of fraud.
The law suit seeks money for those who bought Sino-Forest shares on the stock market and through the company's public offering.
"The securities sold by Sino via the offerings were sold at artificially inflated prices as a result of the representation and the other misrepresentations," the statement of claim said.
The allegations against Sino-Forest have not been proven in court. The company did not return a call requesting comment Wednesday.
The claim names several Sino-Forest executives, including former CEO Allen Chan; auditor Ernst & Young; and financial institutions that had acted as underwriters for the company's 2009 prospectus offering. They include TD Securities, Dundee Securities, RBC Securities, Scotia Capital, and CIBC World Markets.
"The underwriters earned fees from the class, whether directly or indirectly, for work that they never performed or that they performed with gross negligence, in connection with the offerings, or some of them," according to the statement of claim.
"Sino, E&Y and the individual defendants further breached their duty of care as they failed to maintain appropriate internal controls to ensure that Sino’s disclosure documents adequately and fairly presented the business and affairs of Sino on a timely basis," it said.
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Investment Fraud Litigation |
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Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws. Securities Arbitration. Generally speaking, securities fraud consists of deceptive practices in the stock and commodity markets, and occurs when investors are enticed to part with their money based on untrue statements.
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