WORLD TAKE NOTICE: QUEBEC PROTECTS ITS RESIDENTS AGAINST MULTINATIONAL FRAUDSTERS

May 29, 2018. Morganti & Co teamed up Faguy & Cie (Montreal) to advance a shareholders’ claims against Volkswagen Aktiengesellschaft (“VWAG”). The claim alleges, see the VWAG’s guilty plea filed in the U.S. Federal District Court for the Eastern District of Michigan, that VWAG engaged in a global fraud concerning certain of its diesel engines and emissions (a/k/a, “dieselgate scandal”) and, as result, its investor documents released between March 12, 2009 and September 18, 2015, contained material inaccuracies.

The Plaintiff seeks to recover the monetary damages (drop in share price) after VW released the September 18, 2015 press release concerning the scandal on behalf of all Quebec-based investors that purchased VW’s equity securities on any stock exchange and over-the-counter transaction, e.g., United States and German markets.

The Quebec court affirmed that investors are only required to prove that the claim is arguable opposed to providing that it being “likely to be successful”, which is a lower standard than the statutory claim. The court rejected VW’s argument that Quebec does not have jurisdiction over the claim, e.g. “the injury was really suffered in Quebec” by an Quebec investor. Importantly, the court recognized that VW’s omissions about installing the diesel emission device was a material fact. The court further opined that VW “conflates the notions of causality and reliance”.

Courtroom submission credits to Shawn Faguy. Andrew Morganti and Shawn Faguy are also working together in the shareholder claims concerning Amaya Inc. (“TSG”), Concordia International Group (“CXR”), Goldcorp Inc. (“G”), and Valeant Pharmaceuticals International, Inc. (“VRX”).