SHAREHOLDER ALERT: GuestLogix Inc. announces an internal investigation of its financial statements

TORONTO, Dec. 22, 2015 /CNW/ – Morganti Legal, a cross-border law firm focused on representing investors, has commenced an investigation into potential violations of the securities laws by GuestLogix Inc. (TSX: “GXI” and CUSIP: 40163P) and MNP LLP, its auditor.

On December 16, 2015, GuestLogix published a press release revealing that an internal review had found that the Company may not have been following proper revenue recognition accounting policies in its historical financial statements. This internal review indicated that the effects of this improper revenue recognition are material.  The Company’s has previously acknowledged that it had some weaknesses relating to recognition and recording of foreign currency transactions that impact internal and external reporting.

The disclosure’s impact on the market was immediate and significant, resulting in the Company’s share price dropping by 43% that very same day, on volumes more than 10 times the stock’s average trading volume for the previous three months.

Investors who purchased GuestLogix’s securities between March 27, 2013 and December 16, 2015, are encouraged to stay informed and contact Morganti Legal at (888) 226-0845 or by email at info@morgantilegal.com for further information.  You may learn more about Morganti Legal at www.morgantilegal.com.

This press release may be considered attorney advertising in some jurisdictions under the applicable law and ethical rules.

The Supreme Court affirms the “low threshold” to proceed with statutory shareholder claims, and advises on the proper interpretation of the limitations period

On December 4, 2015, the Supreme Court of Canada published its long-awaited decision in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60 (hereafter “CIBC”).   The Court affirmed and clarifed the threshold for investors to advance statutory claims against publicly traded companies as articulated in the lower courts.  Additionally, the Court clarified how the limitations period is to be applied in statutory shareholder claims.

The Supreme Court took the opportunity in CIBC to clarify its earlier decision in Theratechnologies Inc v. 121851 Canada Inc, 2015 SCC 18.  Since the publication of Theratechnologies, lower courts have published overtly hostile opinions against investors’ claims while denying leave to proceed except in the most blatant examples of securities fraud.

Within the recent past, the lower “motion” courts in Ontario appear to have been struggling with the issue of when a shareholder has presented enough evidence at the preliminary stage of litigation (pre-discovery and relying simply upon public information) to provide the court with the assurance that there is a reasonable possibility that the action will be resolved at trial in favour of the investor, in order to allow him/her to proceed with the statutory claim against the responsible issuer and others  (see, section 138.8 of the Ontario Securities Act).   We blame this struggle on an over-reaction (fueled by Bay Street rhetoric) to some ambiguous language found in Theratechnologies Inc.  A thorough reading of CIBC suggests that the Supreme Court shares our sentiment.

In CIBC, the Court unanimously upheld the lower court’s decision on the standard of the threshold to grant leave to proceed with a statutory secondary market claim. Chief Judge McLachlin, Rothstein, Cromwell, Moldaver, Karakatsanis, Gascon, and Côté all concurred that:

Strathy J interpreted this statutory language as establishing a relatively low threshold according to which leave will be denied only if, ‘having considered all the evidence adduced by the parties and having regard to the limitations of the motions process, the plaintiffs’ case is so weak or has been so successfully rebutted by the defendant, that it has no reasonable possibility of success’: para. 374.  The Court of Appeal upheld this interpretation of s. 138.8(1)(b). (CIBC, at para. 118)

The Court further added that a plaintiff “must ‘offer both a plausible analysis of the applicable legislative provisions, and some credible evidence in support of the claim.’”  (Ibid., at para. 121, citing, Theratechnologies, emphasis added).

The Supreme Court of Canada reaffirmed that the threshold is there must be a reasonable possibility that the action will be resolved in favour of the plaintiff at the trial. (Ibid., at paras. 121 – 122).  Justice Karakatsanis, on behalf of herself, Moldaver, and Gascon, expressly added that Justice Strathy’s view of the threshold for leave to proceed, upheld by the Court of Appeal, is the correct view, i.e. “a low threshold”. (See, Green v CIBC, 2012 ONSC 3637, at para. 373: “I respectfully agree with van Rensburg J. and Tausenfreud J. that the leave requirement is a relatively low threshold”, upheld in 2014 ONCA 90, at para. 96).

The Court has signaled that if an investor comes forward with credible evidence, e.g., uncontested expert evidence supporting the allegations that the defendant published misrepresentations, the lower courts cannot engage in weighing expert evidence and must allow the claim to proceed.  Indeed, the Supreme Court reiterated the “low threshold” as interpreted by Justice Strathy within the context that the motion for leave to proceed is at the preliminary stages of the litigation prior to discovery.  After the defendant(s) delivers its statement of defense, it is always welcome to seek to have the investor’s claim(s) dismissed by way of summary judgment.

Shareholder Alert: Morganti Legal and Faguy & Co. Announce Class Action Lawsuit Against Valeant Pharmaceuticals International Inc. (VRX)

Morganti Legal (Toronto) and Faguy & Co. (Montreal), announce that on Monday, October 26, 2015, they issued a class action claim in Quebec on behalf of all investors that purchased the securities of Valeant Pharmaceuticals International Inc. listed on the Toronto Stock Exchange and the Swiss Stock Exchange.  (TSX and SIX: “VRX”).

Investors who purchased shares of Valeant Pharmaceuticals International Inc. on the Toronto Stock Exchange and Swiss Stock Exchange on or before October 21, 2015 are encouraged to stay informed and protect their rights. You may contact Morganti Legal at (888) 226-0845 or by email at info@morgantilegal.com or Faguy & Co. at (514) 285-8100 or by email at info@faguyco.com for further information.

None of the allegations have been adjudicated in court at this time.

Morganti Legal is comprised of experienced securities lawyers that investigate, litigate and resolve economic and financial disputes. You may learn more about Morganti Legal at www.morgantilegal.com. The Firm currently represents investors that purchased securities of Allied Nevada Gold Corp, BP plc, Detour Gold Corporation, Ithaca Energy Limited, MDC Partners, Inc., Silvercorp Metals Inc., and Tesco plc.

Faguy & Co is a boutique commercial and civil litigation firm. It represents an international clientele and referring law firms worldwide in the jurisdictions of Quebec, Ontario and before the federal courts. To learn more about Faguy & Co. please visit www.faguyco.com.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

For further information:  Andrew Morganti, (English language) at (888) 226-0845 or by email at info@morgantilegal.com; Shawn K. Faguy (French language) at (514) 285-8100 or by email at skf@faguyco.com.

Andrew Morganti Lectures at University of Michigan Law

Cy Moscow, partner of leading Detroit-based law firm Honigman Miller Schwartz & Cohn LLP and adjunct professor at University of Michigan School of Law, has once again invited Andrew Morganti to lecture to the third-year law students in his advanced securities regulations course on the topic of shareholders’ rights litigation from the perspective of the plaintiff.

Mr. Morganti has a longstanding interest in the education and development of future lawyers, and has been giving talks to Mr. Moscow’s class for the past decade. This year’s lecture on October 27, 2015 will address how securities class-actions are started and the general process involved in carrying out such actions, as well as discussing the similarities and differences between securities class litigation in the United States compared to Canada.

Shareholder Alert: Morganti Legal Announces Investigation of Valeant Pharmaceuticals International Inc. (VRX)

TORONTO, Oct. 23, 2015 /CNW/ – Morganti Legal, a cross-border law firm focused on representing investors, has commenced an investigation into potential violations of securities laws by Valeant Pharmaceuticals International Inc. (TSX and NYSE: “VRX”) in respect of allegations that Valeant may have released materially misleading business information to the investing public including potentially inflating revenues by recording intercompany sales in its revenue figures.

On October 19, 2015, Southern Investigative Reporting Foundation (SIRF) issued a report on Valeant revealing an undisclosed relationship between the Company and specialty pharmacy Philidor RX Services. Upon release of this news, Valeant’s share price on the TSX fell $14.35 per share from the previous trading day’s close to close at $213.05 per share.

On October 21, 2015, Citron Research issued a subsequent report on Valeant, which alleged, amongst other things, that Valeant and Philidor maintain phantom pharmacies to improperly recognize and record revenue from the sale of drugs, or in order to avoid scrutiny from auditors. Upon release of this news, Valeant’s share price on the TSX dropped 40% during intraday trading, and ultimately fell $36.64 per share to close the day at $154.21.

Investors who purchased shares of Valeant Pharmaceuticals International Inc. on the Toronto Stock Exchange on or before October 21, 2015 are encouraged to stay informed and protect their rights. You may contact Morganti Legal at (888) 226-0845 or by email at info@morgantilegal.com for further information.

None of the allegations have been adjudicated in court at this time.

Morganti Legal is comprised of experienced securities lawyers that investigate, litigate and resolve economic and financial disputes. You may learn more about Morganti Legal at www.morgantilegal.com. The Firm currently represents investors that purchased securities of Allied Nevada Gold Corp, BP plc, Detour Gold Corporation, Ithaca Energy Limited, MDC Partners, Inc., Silvercorp Metals Inc., and Tesco plc.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

SOURCE Trilogy Class Actions 

For further information: Eli Karp, Morganti Legal at (888) 226-0845 or by email at info@morgantilegal.com.

Morganti Legal: Canadian Shareholder Files A Lawsuit Against MDC Partners Inc.

German Shareholders Must be Appreciated!

Andrew Morganti speaks to German media regarding shareholder rights: