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ARTICLE · 01 OCTOBER 2025

Yes, You Can Be Sued In A Securities Class Action When A Public Correction Causes No Price Decline

McCarthy Tétrault
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Ontario's Court of Appeal has held in Terry Longair Professional Corporation v. Akumin Inc. that an issuer and other defendants can be sued even when a public correction...

CanadaLitigation, Mediation & Arbitration
Canadian Securities Regulatory Monitor
Canadian Securities Regulatory Monitor
Shane D'Souza
Shane D'Souza
Ljiljana Stanic
Ljiljana Stanic
Chris Puskas
Chris Puskas
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Ontario's Court of Appeal has held in Terry Longair Professional Corporation v. Akumin Inc.1 that an issuer and other defendants can be sued even when a public correction of a misrepresentation is not directly associated with a drop in the secondary market price of the issuer's shares. While this decision means reporting issuers have greater class action risk from public corrections, it may also allow defendants to argue for reduced damages in light of the statutory damages provisions of the Ontario Securities Act ("OSA").

Background

The background facts and allegations are explained in our prior article.

Briefly, in June 2021, Akumin Inc. ("Akumin") announced an agreement to acquire Alliance HealthCare Services Inc. ("Alliance") for $820 million USD. If completed, this transaction would transform Akumin's business and roughly triple its size. It was expected to close in Q3 2021.

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