An Alberta court has declined to certify a proposed lawsuit brought by disgruntled investors against their former rep and his firm as a class action — ruling instead that their claims should be heard in individual lawsuits.
A judge from Alberta’s Court of Queen’s Bench denied the application from four investors seeking to bring a class action against their former advisor, Adam Woodward, his firm, Richardson GMP Ltd. and a branch manager.
In 2018, Woodward was fined $450,000 and permanently banned by an Investment Industry Regulatory Organization of Canada (IIROC) hearing panel, which found that he violated several IIROC rules, including suitability failures.
According to the court’s decision, the investors are now seeking to sue the former advisor and the firm, alleging that they suffered losses due to unsuitable investment advice and supervisory failures. None of the allegations has been proven in court.
Rather than suing individually, the investors tried to bring the case as a class action on behalf of all of Woodward’s clients between 2012 and 2016, estimating that this would represent over 1,000 households and more than 1,500 individual clients.
In particular, they allege that clients’ individual needs and circumstances were disregarded, and that they were provided with “an unsuitable, one-size-fits-all investment strategy” that was in conflict with the clients’ best interests.
However, the court sided with the defendants in the case, ruling that the claims are not suitable to be tried as a class action after finding that the plaintiffs didn’t provide evidence that they all received the same advice.
“It has not been shown that those in the proposed class were subjected to the same treatment, or offered the same investment advice and investment products,” the court noted in its decision.
The court also ruled that a class action is “not the preferable procedure” for litigating the investors’ claims.
“A class proceeding would not provide a fair, efficient, and manageable procedure that is preferable to any alternative means of resolving the claims here,” it said.