You're a shareholder in a big company that just acknowledged an error in its books and now says it earned a lot less than it originally announced. The stock tanks and you lose a bundle. So, you band together with other investors and sue
It's called a securities class action. It has long been a fixture of litigation in the United States. Since 2005, it has been on the rise here after Ontario legislation made it easier for investors who bought stocks on the secondary market to sue.
Now, for the first time, a U.S. ranking of the top 50 law firms that represent plaintiffs in securities class actions has included international firms, including those in Canada.
The top Canadian firm should be no surprise: Coming in at No. 32 in the world is London, Ont.-based Siskinds LLP. Its lawyers, including Michael Robb and Dimitri Lascaris -- the latter a former member of a "card counting" ring that aimed to beat casinos at their own game -- seem to be on too many of these cases to count.
Along with Windsor-based rivals Sutts Strosberg LLP (which ranks 41st on the overall securities class-action list) the pair represent investors on the landmark Imax Corp. case. The lawsuit is the first to be certified as a securities class action under Ontario's new rules, and was launched after the company had to restate its earnings in 2005.
The number of these cases is on the rise here. But the data suggest this new legal battleground in Canada is still in its infancy.
The ranking, conducted by Security Class Actions Services, a division of shareholder advisory firm Institutional Shareholder Services Inc., lists firms by the amount of money they recovered for investors in 2010.
Siskinds ranked 32nd in the world with a total of almost $43-million from six settlements in 2010 -- an average of $7.2-million for each case. Sutts Strosberg, also a major player in class actions, ranked 41st, with $33-million from two settlements. Vancouver's Camp Fiorante Matthews ranks 43rd with one settlement worth $27-million.
By contrast, the top of the table is cluttered with U.S. firms claiming more than $500-million each in settlements. The top-ranked firm, Bernstein Litowitz Berger & Grossman, which was behind post-financial-crisis lawsuits against AIG and Lehman Bros., brought in almost $1-billion, with 16 settlements averaging $16.5-million each.