Canada’s first Investor Protection Clinic launches

Maria Nikolova

The Clinic provides pro-bono legal advice and assistance, including drafting complaint letters and negotiating settlements, to people in Ontario.

Canada is making another step in securing protection of vulnerable investors via the launch of its first Investor Protection Clinic.

The Clinic is a joint project of FAIR Canada, the Law Foundation of Ontario and Osgoode Hall Law School. The main function of the Clinic is to provide pro-bono legal assistance to people in Ontario who have invested their savings and suffered an investment loss but cannot afford to hire a lawyer to help them.

Common issues that the Clinic may be able to help with include, for instance, cases where one’s advisor misrepresented the risk of the investments he/she put the investor in, or cases where investor funds were used in ways that the investor was unaware of. The Clinic may be able to assist investors by:

  • writing a complaint letter on one’s behalf to the company or the regulator;
  • giving investors options on how to proceed with their issues;
  • or even representing an affected person at a hearing.

Importantly, the Clinic is unable to help with losses that occurred as a result of market forces and risks inherent in investing. This is a key difference between the Clinic and the fraudulent schemes that claim to help investors recover the money lost to, say, a fraudulent binary options broker.

The Clinic is staffed with Osgoode Hall Law School students that are paired with supervising lawyers from law firms in Ontario. The Investor Protection Clinic also functions as a research lab, collecting data in an anonymized way that will be used for research purposes.

The Investor Protection Clinic reviews each request for legal assistance. Whether or not the Clinic can provide an investor with legal services is determined on a case-by-case basis. The Clinic will decide whether or not to take a person on as a client by considering factors such as, but not limited to: income, assets, net worth, and the nature of the concerns.

The launch of the Investor Protection Clinic is announced shortly after the Canadian Securities Administrators (CSA), an organization which has among its members the securities regulators from 10 Canadian provinces and 3 territories, made a move towards protecting investors by introducing a ban on binary options. The ban covers all sorts of “binary options”. It will apply to binary options, regardless of the specific name. This means that the prohibition will cover (list is not exhaustive) “all-or-nothing options”, “asset-or-nothing options”, “bet options”, “cash-or-nothing options”, “digital options”, “fixed-return options” and “one-touch options”.

The new rules prohibit advertising, offering, selling or otherwise trading a binary option with or to an individual.

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