Manulife facing $500M lawsuit

TORONTO — An Ontario judge has certified a $500-million class-action lawsuit against Manulife Financial Corp.

The plaintiffs claim that Manulife misrepresented and failed to disclose the size of the company’s exposure to equity markets during the financial crisis of 2008. The class period starts on April 1, 2004 and runs until Feb. 12, 2009, which was the day that Manulife ultimately disclosed the extent of its losses during the 2008 fiscal year. Manulife shares plummeted in the days following the Feb. 12 announcement.

The class in the Ontario case is open to all investors, except those from Quebec, who purchased Manulife common shares during the class period. A separate Manulife securities class action for Quebec investors was certified in that province in 2011.

The judge granted permission for the plaintiffs to seek relief under provisions of the Ontario Securities Act that allow investors to sue for “secondary market misrepresentation.” The claim also seeks common law damages for negligence, negligent misrepresentation and unjust enrichment.

The plaintiffs’ claims have yet to be proven in court. The certification ruling released on Thursday merely allows the case to move forward to trial as a class action. It’s not a decision on the merits of the suit.

London, Ont.-based Siskinds LLP filed the claim in 2009 on behalf of the representative plaintiffs, the trustees of the Ironworkers Ontario Pension Fund and Leonard Schwartz. Judge Belobaba heard three days of argument on the leave and certification motion in early June. The plaintiffs are suing Manulife Financial Corp., along with former CEO Dominic D’Alessandro and former CFO Peter Rubenovitch.

Manulife, still reviewing the court’s ruling, denies the allegations in the claim.