Legal Question in Investment Law in Canada

Re: Misrepresentation

Yes, this kind of a misrepresentation is probably sufficiently material to be held fraudulent by a court, especially if the same misrepresentation appears in materials designed for review by investors such as SEC registration statements, quarterly and annual filings, formal lists of officers, and the like.

Research into the breadth and depth of the misrepresentation, and whether it is flagrant and deliberate, and whether investors have sustained actual harm, would be useful before initiating suit.

There are stiff penalties under the securities laws, and little tolerance for 'mistakes' of this kind -- anyone who makes a false statement in a prospectus or the like may be liable for penalties and damages whether or not the misstatement was deliberate, negligent, or innocent. In other words, strict liability. A successful plaintiff may be entitled to recover attorney's fees as well.

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