TRENDS TO WATCH FOR CAPITAL MARKETS PARTICIPANTS
In this issue of Canadian Securities Litigation Outlook, we review the following recent developments shaping the trends to watch in 2016: securities class action defence strategies, gatekeeper liability, insider trading prosecutions, the progress of Canadian securities regulators in enforcement initiatives, including credit for cooperation, whistle-blower regimes and other initiatives, and the impact and regulation of short seller activity in Canadian capital markets.
In the secondary market class action context, we examine the implications of the Supreme Court of Canada's clarification of the leave threshold, and review some recent examples of successful defence strategies.
We consider the increased focus on gatekeeper liability through the lens of auditor and underwriter liability in the secondary market liability context and the securities regulatory context.
Recent successes in the prosecution of insider trading cases highlight the regulator's ability to successfully prosecute in the absence of a "smoking gun" through effective reliance on circumstantial evidence.
The Ontario Securities Commission's credit for cooperation initiatives, pilot mediation program and proposed whistleblower policy are all examples of efforts to achieve enhanced enforcement and efficient resolution of regulatory matters.
Finally, with the recent wave of short seller reports hitting Canadian issuers with devastating results, we review the one attempt so far by a Canadian securities commission to regulate such activity and the troubling implications from short seller activity. It remains to be seen whether securities regulators will continue to step into the fray in the future.
We will continue to monitor and report on these and other key developments as they unfold.
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