A $9-billion class-action launched by burned investors in Sino-Forest Corp. – the Toronto-listed Chinese forestry giant that collapsed amid fraud allegations in 2011 – has been given the green light to go to trial by an Ontario Superior Court judge.
In a ruling released on Tuesday, Justice Paul Perell also approved a move to put proceedings against the big-name Bay Street financial institutions that underwrote Sino-Forest’s stock and debt offerings on hold, pending court approval of a tentative settlement.
The plaintiffs had alleged that the underwriters, among them Credit Suisse Securities (Canada) Inc., TD Securities Inc., Dundee Securities Corp., RBC Dominion Securities Inc., Scotia Capital Inc. and CIBC World Markets Inc., were negligent in promoting Sino-Forest. The defendants denied the allegations. No financial amounts or other details in the tentative settlement were disclosed in Tuesday’s ruling.