The Supreme Court authorizes a class action against Desjardins financial services firm inc. and Desjardins global asset management inc.
On October 30, 2020, the Supreme Court of Canada gave a green light to the members of the Desjardins caisses populaires, who sought to institute a class action following the loss of all returns on their investments. This important judgment that Desjardins Financial Services Firm Inc. and Desjardins Global Asset Management Inc. (“Desjardins“) will have to face justice.
From 1999 to 2008, Desjardins offered Perspective Plus Term Savings and Alternative Term Savings through its network of caisses populaires. These investments consisted of term deposits of 3, 5 or 7 years, whose capital was guaranteed and which included the promise of a variable return. In 2008, the capital invested in these investments was approximately $5.3 billion.
According to the application, Desjardins represented that these investments were secure and offered an attractive return, but did not disclose the significant risk of loss associated with the financial strategies used to investors. These financial strategies included the use of significant leverage.
In the fall of 2008, Desjardins decided to withdraw all of its members’ investments, and advised investors that they would only receive their initial capital at the end of their investment term, rather than any return. Between 2002 and 2015, Desjardins paid no return on the capital invested by its members in Perspective Plus Term Savings and Alternative Term Savings.
The Supreme Court of Canada has concluded that Desjardins clients have demonstrated a case serious enough to go forward to a trial on the merits. The Supreme Court of Canada’s decision means that Desjardins clients who have invested in Perspective Plus Term Savings and Alternative Term Savings will be able to seek compensation for their losses.
An earlier class action involving Desjardins members who acquired similar investments offered through Desjardins entities was authorized in 2005 and is currently proceeding before the Quebec Superior Court.
To consult our web page for this class action, click here.