As part of a new partnership with the Investor Protection Clinic (IPC) at York University’s Osgoode Hall Law School, the Investment Industry Regulatory Organization of Canada (IIROC) announced it will provide the IPC with major funding annually for the next five years.
In a joint statement, both the regulator and the IPC say the joint effort will meet a critical need in the community for free legal services for vulnerable, harmed, retail investors who believe their investments were mishandled and who cannot afford a lawyer.
Launched in 2016 with seed funding from the Law Foundation of Ontario, the clinic employs three clinic staff and 12 student caseworkers who are paired with supervising lawyers from the clinic’s pro-bono partner law firms. (The clinic has arrangements with eight supervising firms.) Clinic cases have ranged from seniors who have lost their entire retirement savings to those who’ve had their investments mishandled by advisors.
They say common issues the clinic may be able to help with include cases where advisors misrepresented investment risk to their clients, cases where funds were used in ways clients were not aware of, unexplained fees, high trading activity resulting in high commissions or fees, and cases where advisors signed client forms without a client’s permission. The clinic assists its clients by writing complaint letters on their behalf to companies and regulators. It will also give options on how to proceed with the client’s issues and may represent the client in legal proceedings as well. Whether the clinic is able to provide clients with legal services is determined on a case-by-case basis.
In addition to taking on self-referred clients, the clinic also receives referrals from the Ontario Securities Commission (OSC), from IIROC, from the Ombudsman for Banking Services and Investments (OBSI) and from the clinic’s pro-bono partner law firms. “IIROC has referred investors to the clinic since it was first established,” says IIROC’s vice president and general counsel, Doug Harris. “We are pleased to take the important next step of sponsorship.”
In 2019 and 2020 the clinic conducted 18 intake interviews, worked on 22 files and closed 11 cases. The clinic’s clients during the year were predominantly seniors. Although 75 per cent of the clinic’s clients were employed, over 70 per cent of the clinic’s clients were between ages 50 and 70. More than 83 per cent of the clinic’s clients said they had low or no investment knowledge.