Underwriters May Have Expertise But That Does Not Make Them "Experts"

In the LBP Holdings v. Allied Nevada Gold Corp. decision released on April 27, 2016, the Ontario Superior Court of Justice refused to allow the underwriters of a secondary public offering (SPO) to be added as defendants to a proposed statutory securities class action against the issuer in respect of statutory and unjust enrichment claims.

Among other things, the plaintiff argued that the underwriters were liable as "experts" within the meaning of Part XXIII.1 of the Ontario Securities Act (OSA). Justice Belobaba acknowledged that underwriters have professional expertise in the capital markets, but concluded that such expertise was not enough to expose them to liability as "experts" under Part XXIII.1 of the OSA.