Market Timing Class Action

The Claims

In September 2003, the Attorney General of New York announced the results of an investigation into what was referred to as ‘market timing’ trading in American mutual funds. That investigation led to a series of settlements requiring the offending funds to pay billions of dollars.

Shortly after the results of that investigation were announced, the Ontario Securities Commission (the ‘OSC’) launched its own investigation into similar practices in Ontario. It resulted in five fund managers, including both defendants, entering into settlement agreements with the OSC pursuant to which they paid over $200 million to their respective funds.

This class action was commenced against the five funds that settled with the OSC. Three of those funds have since settled with the plaintiffs. As a result, the trial proceeded only against AIC Limited, now known as AIC Global Holdings Inc. (‘AIC’) and CI Mutual Funds Inc., now known as CI Investments Inc. (‘CI’). Both are sizeable mutual funds in the Canadian market.

This action arises out of conduct by which AIC and CI allowed certain large, sophisticated investors to engage in frequent trading in their funds. The plaintiffs allege that this frequent trading diluted the returns of long-term investors in the funds.

The Class

Any investors who held money in AIC funds from Jan. 1, 1999, to Sept. 30, 2003, or CI Mutual funds from Sept. 1, 1998, to Sept. 30, 2003.

Updates

Class action was commenced in 2006.
On December 13, 2013, this action was certified by the Supreme Court of Canada. A subsequent case management order split the trial of this proceeding into two stages: a trial in respect of liability, and a trial in respect of damages.
The liability trial was held in February, March and June 2022.
On February 13, 2023, Justice Marcus Koehnen of the Superior Court of Justice issued reasons for judgment in respect of the liability trial. Justice Koehnen found that both Defendants, CI Mutual Funds Inc. and AIC Limited, breached their duty of care to prevent ‘market timing’ in their funds.
The damages trial was heard before Justice Koehnen between March 28 to May 16, 2025.
On July 16, 2026, Justice Koehnen ordered CI Mutual Funds Inc. and AIC Limited to pay Class Members damages and interest in excess of $170 million.