Will Recent Decision "Open the Floodgates" To Securities Class Actions Against Foreign Issuers?

The recent decision of the Ontario Superior Court of Justice in Kaynes v. BP (Kaynes) has determined that the statutory cause of action for secondary market misrepresentation pursuant to Part XXIII.1 of the Ontario Securities Act is a "statutory tort" that, if committed in the province, will create a presumption that Ontario courts have jurisdiction over the dispute. Importantly, the Court ruled that the fact that the securities at issue were purchased over a foreign exchange will not be sufficient to rebut the presumption of jurisdiction. The decision suggests that Ontario courts, unlike their American counterparts, will readily assume jurisdiction over securities class actions with strong foreign elements. The decision could have significant implications for public companies that are not reporting issuers in Ontario (or other Canadian provinces) because it increases the likelihood that they may be subject to Canadian secondary market liability regimes. It also