Court of Appeal Reiterates the Importance for Investors to Conduct Due Diligence


The Court of Appeal of Quebec has rendered an important decision on the liability of securities dealers and investment advisors. In Mazzarolo v. BMO Nesbitt Burns ltée, 2013 QCCA 245, the Court of Appeal, in accordance with its precedents, reaffirmed the respective duties of investors, investment advisors and dealers, while reiterating the importance of differentiating the mandate of an investment advisor from that of a portfolio manager.

Facts -

Mr. Mazzarolo, a wealthy businessman, sued, on his own behalf and on behalf of his companies, his investment advisors Messrs. Lazarus and Albert, as well as the dealer BMO Nesbitt Burns, for over 4 million dollars. The case was dismissed at trial by the Honourable Joël A. Silcoff, J.S.C. Mr. Mazzarolo brought the matter before the Court of Appeal.

Mr. Mazzarolo claimed to have limited to a maximum of $250,000 the capital gains arising from the redemption of certain mutual funds in two of his accounts. Mr. Mazzarolo was also dissatisfied with the performance of one of his accounts, arguing that his investment advisors acted in fact as portfolio managers and that they had ventured beyond the investment proposal which Mr. Mazzarolo claimed to have accepted.

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Topics:  Appeals, Due Diligence, Investment Adviser, Investors, Portfolio Managers, Securities Dealers

Published In: Business Torts Updates, Civil Procedure Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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