Financial Loss Claims

Claims for Financial Loss

MSC Notice 2011-37
This notice replaces MSC Notice 2003-4

The Securities Act

The Securities Act (Manitoba) permits a claim to be made for repayment of money lost through illegal or improper trading of securities conducted in Manitoba.

An order for compensation for financial loss may be issued following a Commission hearing if there is evidence at the hearing to show:

• there has been illegal or improper trading or advising in the trading of securities in Manitoba
• this trading or advising has resulted in a financial loss to the claimant
• the amount of the financial loss

Types of eligible claims

• maximum claim is $250,000.00 *
• there must be evidence available (such as account statements or cancelled cheques) to permit the calculation of the amount lost by the claimant
• the loss must have been caused by the illegal or improper conduct of a person or company trading or advising in the trading of securities in Manitoba

Non-eligible claims

• claims based solely on the reduction of the value of an investment
• claims involving matters that are not within the jurisdiction of the commission under The Securities Act
• where a court action has been commenced or concluded to recover the same financial loss

To make a claim

• complete a claim form
• attach all documentation relating to the claim
• provide any information requested by Staff of the Commission relating to both the matters under investigation and the claim

Review of claim

• Staff will complete a review of each financial loss claim
• an investigation must show evidence of illegal or improper conduct relating to the trading of securities or the providing of advice relating to the trading of securities
• there must be sufficient evidence to lead the Director to conclude that the misconduct requires a hearing before the Commission
• the Director must also conclude that there is sufficient evidence to bring a claim for financial loss to a Commission hearing
• in some cases a matter will be referred to another regulatory, investigative or third party agency that is better able to investigate the matter. Examples of agencies where matters are referred include the police, Investment Industry Regulatory Organization of Canada, Mutual Fund Dealers Association or the Ombudsman for Banking Services and Investments. A decision to refer the matter to another agency, as well as a decision not to present a claim to a hearing does not prevent a claimant from proceeding to court or arbitration (if available) to seek compensation

If your claim goes to a hearing

The Manitoba Securities Commission holds hearings to determine whether a person or company should be permitted to trade in securities in Manitoba. Hearings are held before members of the Commission who are independent of Staff of the Commission. These members have not seen the evidence of the claim prior to the hearing and make a decision based on the evidence presented at the hearing.

Some facts about hearings

• hearings are public
• hearings are commenced by way of a Notice of Hearing and a Statement of Allegations
• Commission Staff present evidence to the hearing to establish either illegal or improper conduct, as well as evidence to support a claim for an order directing repayment of a financial loss. This is done without cost to the person making the claim
• you may be required to testify at the hearing
• you have the right to retain your own lawyer both prior to and during the hearing, at your own expense. The person or company alleged to have acted improperly has the right to challenge the evidence presented, and present other evidence
• you lose your right to start a court action for the same loss once the hearing has commenced

Following a hearing

Similar to a court, the members of the Commission will review the evidence presented at the hearing and will make one of the following decisions:

• the evidence does not show misconduct. This will result in a claim for financial loss being rejected
• improper or illegal misconduct is proven, but there is not enough evidence to prove the claim
• both the improper or illegal misconduct and the claim for financial loss have been proven
• what penalty should be imposed

Once an order for compensation for financial loss is made by the Commission

•  the order will set the amount to be paid, as well as who is responsible to pay the loss
• you can file the order as a judgment with the Court of Queen’s Bench of Manitoba
• you are responsible for taking whatever action is required to collect on the judgment.

As a decision to make a claim can affect your right to commence an action in court, it is strongly recommended that you seek independent legal advice to determine whether it is in your best interest to make a claim to the Commission. In addition, all court actions are subject to limitation dates, which means any court action must be started before a specific date. The limitation date to start a court action does not change as a result of a claim being made to the Commission. It is your responsibility to comply with any applicable limitation dates as there is no guarantee a decision will be made on a claim prior to the date a court action must be started.

Manitoba Securities Commission

October 31, 2011

 

* Effective June 11, 2009 the maximum amount for Financial Loss Claims was raised from $100,000.00 to $250,000.00

 

 

Download the Claim form here.

Financial Loss Claims Report

In some situations, an investor loses money because of the illegal or improper conduct of a market participant. If the losses resulted from illegal or improper behavior, an investor can make a claim to recover financial losses up to $250,000.

The Manitoba Securities Commission reviews all complaints and claims and if warranted, conducts an investigation and a hearing to determine whether that person or company should be allowed to continue to sell stocks, bonds, mutual funds or other forms of securities in Manitoba.

A claim can be made in the event that you have suffered a financial loss of up to $250,000 as a result of one of the following circumstances:

► A violation of The Securities Act
► The illegal or improper conduct of a person or company selling securities

The Manitoba Securities Commission takes personal claims very seriously and if it is determined that a claim for Compensation for Financial Loss can be put forward, the following steps will be taken:

1. Commission hearing to determine if misconduct occurred and to request a compensation order if warranted
2. Commission staff will present the claim on behalf of the investor. There is no cost to the investor to file a claim
3. If an order is issued as a result of the hearing it can be filed as a Judgment of the Court of  King’s Bench of Manitoba without
the need to file a Statement of Claim

Financial Loss Claims Report
March 31, 2024
SUMMARY OF CLAIM ACTIVITY

Status	February 1, 2003- March 31, 2023	April 1, 2023-March 31, 2024	Total Inception-March 31,2024
Claims Initiated by MSC	402	1	403
Claims initiated by claimant	22	0	22
Closed – no claim Filed	245	0	245
Claims received	179	1	180

 

Since the Financial Loss Compensation legislation was enacted in February 2003, The Manitoba Securities Commission has sent 403
letters to potential claimants advising them of their ability to make a claim. If a claim is not filed with the Commission within one year of a
letter being sent to a potential claimant, the file is closed. A further 22 claims have been initiated by claimants who made their application
directly to the MSC.

In the past fiscal year, there were no claim forms filed with the Commission.

 

SUMMARY OF ACTIVE CLAIMS

Status	As of March 31, 2024
Approved by Director	1
Pending	0

 

As at March 31, 2024 there was one claim approved by the Director for a hearing.

As at March 31, 2024 there were no pending claims being reviewed to determine if they meet the criteria set out in the legislation to have
the claim heard at a Commission hearing. This review may include ongoing investigation into the matter, or gathering of additional
information required in order to assess the claim.

 

SUMMARY OF CONCLUDED CLAIMS

Status	February 1, 2003- March 31, 2023	April 1, 2023-March 31, 2024	Total Inception-March 31,2024
Settled/No Hearing	64	0	64
Comp Ordered – MSC	46	3	49
Rejected	28	1	29
Restitution Ordered – Prov Court	10	0	10
Abandoned	11	0	11
Total Concluded	159	4	163

 

Since inception, 64 claims have been settled without a hearing being held. 49 Financial Loss Orders have been issued by The Manitoba
Securities Commission for a total amount of $1,314,091. In 10 cases, restitution to the clients has been dealt with through the Provincial
Court system. 29 claims were rejected by the Director because the claim did not meet the criteria under The Securities Act. 11 claimants
abandoned their claims after the claim process had been initiated.

 

Status	Legend
Claim Initiated	Letter to victim informing of ability to file claim under Section 148.2 of The Securities Act.
Closed-No Claim Filed	Victim did not file claim with the Commission within one year of receiving notice.
Pending	The investigation related to the claim is ongoing, and/or additional information is required to assess claim.
Forwarded to Director	Awaiting review by director
Approved	Claim approved by Director and will be forwarded to Commission for consideration when a hearing is held.
Concluded	The claim file has been closed.
► Settled/No Hearing	Claim was settled prior to hearing being held, or it was determined that administrative hearing would not proceed.
► Compensation Ordered	Commission issued order for compensation.
► Rejected	Claim does not meet the criteria under The Securities Act.
► Abandoned by Claimant	Decision by victim not to proceed with claim.