IMAX class action suit a wake-up call for companies

January 27, 2010 – 2:30 pm

The Vancouver Sun writes:

An Ontario court’s certification of a class action launched against Imax Corp. by disgruntled shareholders is being touted as a wake-up call for publicly traded companies.

While the certification approval is being appealed by IMAX, law firms that defend companies against class actions are advising clients to revisit their compliance and corporate-governance procedures to protect against similar suits.

The IMAX lawsuit was launched more than three years ago following amendments to the Ontario Securities Act, known as Bill 198. The amendments were intended to make it easier for shareholders to sue officers and directors for civil liability over the alleged misrepresentations or omissions of information in the secondary market.

It’s the first case to be certified after the amendments, which passed on Dec. 31, 2005, and unless it’s successfully overturned on appeal, reflects the legislation’s intent.