Another class action against a fund manager over the allegedly improper payment of trailer commissions to discount brokers has been certified in Ontario.

The Ontario Superior Court of Justice certified the class action against 1832 Asset Management L.P., a subsidiary of The Bank of Nova Scotia. According to the claim, investors were harmed by the improper payment of trailers, ostensibly for advice, which discount brokers are prohibited from providing under the limitations of their registration.

“The plaintiff alleges that the trailing commissions are improper, unreasonable and unjustified, and were paid by the defendant in breach of its duties to the class members who held those mutual funds,” the court noted in its decision.

The allegations have not been proven.

The case against 1832 Asset Management is one of a series of class actions that have been filed against fund managers over the payment of trailers to discounters, and a couple of those have already been certified.

In this case, the court largely adopted the reasoning used for certifying cases against TD Asset Management Inc. and BMO Investments Inc. It determined that the case was suitable as a class action in that it sets out a potentially viable claim, and that there are common facts that apply to a group of investors.

The only issue was whether the proposed plaintiff in the case was suitable to take on the class action on behalf of affected investors. And, the court concluded that this criterion was met too.