Asset managers sue Sino-Forest

By Staff | September 26, 2011 | Last updated on September 26, 2011
2 min read

Northwest & Ethical Investments and Comité syndical national de retraite Bâtirente inc., a Québec based labour sponsored retirement system, have launched a class action suit against Sino-Forest Corporation.

“NEI Investments has a fiduciary duty to protect the interests of our investors and in commencing this action we believe we are acting strongly to uphold the integrity of the investment industry,” says Bob Walker, vice-president, Ethical Funds, NEI Investments. “In our longstanding history of engaging with companies to promote responsible corporate governance practices, this is the first time NEI Investments has taken this last-resort approach to protect investors.”

Also named in the suit are Sino-Forest’s current and former auditors, 15 financial firms that brought Sino-Forest share and note offerings to market, certain forestry consulting firms, and 20 directors and senior executive officers of the company.

The plaintiffs allege the defendants fundamentally misrepresented the integrity of Sino-Forest’s business operations and financial reporting, and materially overstated its assets and financial results. The class action is on behalf of investors who purchased Sino-Forest shares or notes between August 17, 2004 and June 2, 2011.

Shares and other securities tied to Sino-Forest collapsed in value following a report from short-selling analysis firm, Muddy Waters Research.

Both NEI Investments and Bâtirente had each raised governance concerns in relation to the company prior to the release of the report. Both withheld their votes for most of the company directors at the company’s last annual general meeting in May 2011.

“When our members suffer losses in their retirement plans and those losses result from the type of misconduct alleged in the statement of claim, it is our duty to assist in seeking remedies from those who bear responsibility,” says Daniel Simard, General Co-ordinator, Bâtirente.

Trading in Sino-Forest securities has been suspended by the OSC since August 26. staff


The staff of have been covering news for financial advisors since 1998.