Recent legislative amendments to Canadian securities legislation have resulted in increased exposure in Canada for U.S.-based public companies and their officers, directors and professional advisors. This exposure is both substantive and procedural. In the former instance, U.S. public companies may now be found liable in Canadian class action proceedings for misrepresentations related to trading in the secondary market. In the latter instance, what has been referred to as the “gatekeeper” feature of the legislation could be used by U.S. plaintiffs to gather evidence in Canadian proceedings against U.S. defendants, which could then be used in U.S. class actions against the same defendants. This article reviews the relevant provisions of the statutory regime, as well as recent Canadian cases interpreting these provisions, and highlights the associated risks for public companies and their offi cers, directors and professional advisors.

Republished with permission.

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