By Danica Bennewies
It’s Friday, which means its time for another round of Top Five Friday Finds – the weekly series in which we share five of the corporate and securities law news stories that dominated the papers (and our conversations) this week.
Elon Musk took over news headlines on Thursday evening when the Securities and Exchange Commission (SEC) filed a lawsuit against the Tesla CEO for securities fraud. The complaint alleges that Musk provided misleading information, thereby harming investors, with his comments on Twitter back in August about plans to take Tesla private. The SEC is also seeking to have Musk removed as chairman and CEO of Tesla. Tesla later issued a statement calling the SEC action unjustified. In addition to this latest action, Musk was sued for defamation last week by one of the cave divers who helped save the soccer team trapped in a cave in Thailand. The suit is also based on a tweet by Musk, where he called the cave diver a pedophile. Musk later apologized for his actions.
Another major topic of conversation this week has been the United Nations General Assembly. While many headlines are focused President Trump’s participation, Prime Minister Trudeau is also making news. At the Sustainable Development Financing event on Monday, Trudeau announced that Canada is establishing a new office to encourage the private sector, including major pension funds and institutional investors, to invest in infrastructure projects in developing countries. The office will serve as the North American headquarters for the Global Infrastructure Hub, an organization established in 2014 by the G20, and is part of Canada’s commitment to the UN’s sustainable-development goals. Critics of the initiative have raised concerns regarding whether it’s appropriate for the government to be influencing private sector investment decisions. Nonetheless, some Canadian pension funds, such as the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan, have already been investing in global infrastructure projects in countries such as Chile, Peru, and India.
While Trudeau is focusing on sustainable development, securities regulators have been looking into gender equality on company boards. Provincial securities regulators across Canada published a review regarding women on boards and in executive positions on Thursday. This is the fourth review since 2015, and it outlines key trends regarding the representation of women on boards for the period covering December 31, 2017 to March 21, 2018. Among other trends, the review found that the total percentage of board seats held by women has increased by 4% since 2015, and 66% of issuers had at least one woman on their board, a 17% increase from 2015. Furthermore, the number of issuers that have adopted policies for nominating female directors has increased nearly three-fold since 2015.
Now let’s take a look at this week’s legal actions.
Catalyst Group Inc, a private equity investment firm founded by Newton Glassman, has been engaged in a long-running legal battle with rival fund West Face Capital Inc. The series of actions began when Glassman claimed that West Face, along with a number of other hedge funds, were part of a short-selling wolf pack conspiracy that targeted one of Glassman’s companies. West Face denied the allegations and filed a counterclaim against Catalyst for defamation. The latest move in the battle took place on Tuesday, when Catalyst filed a statement of defence to the counterclaim, denying all defamation accusations and bringing up its previous wolf pack claims against West Face. West Face later released a statement claiming that this pleading was further evidence of Catalyst’s attempts to smear West Face’s reputation. All of this took place just two days prior to Catalyst’s annual investors meeting in Toronto.
Ticketmaster is also got caught up in some legal trouble this week. Toronto-based firm Sotos Class Actions has brought a suit against Ticketmaster for taking “double-dip commissions”, allowing professional resellers to purchase huge volumes of tickets to events and then resell them at substantial markups. Sotos alleges that this behaviour has allowed Ticketmaster to take commissions on both sales, thereby increasing their profits. The Competition Bureau also has its eye on Ticketmaster, and is investigating the ticket-seller’s double-dipping practices. All of this comes following a CBC News/Toronto Star investigation into Ticketmaster’s secret scalper program.
That’s all for this week! Check back in next week for another round-up of Friday Finds.