TD settles sales practices class action

By James Langton | February 13, 2024 | Last updated on February 13, 2024
2 min read
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TD Bank will pay $22 million to resolve a shareholder class action brought by a fund manager over revelations of alleged misconduct in the retail banking business that temporarily damaged the bank’s share price.

Quebec Superior Court judge Donald Bisson approved a proposed settlement between the bank and the representative plaintiffs in the case — fund manager Majestic Asset Management and Turn8 Partners Inc. — which alleged the bank’s continuous disclosure contained misleading statements about the bank’s business practices and ethics.

According to the court’s decision, the plaintiffs accused TD of having “exerted great pressure on its employees to sell products and services in order to achieve its sales objectives. The plaintiffs allege that TD made false statements regarding this treatment of its employees, its customers and its ethics policies, which had the effect of artificially inflating the price and value of TD’s securities.”

When allegations of high-pressure sales tactics were revealed in a CBC news report in March 2017, the bank’s share price dropped 5.55%, causing shareholder losses, the plaintiffs alleged.

Following a mediation process, the bank agreed to settle the case without admitting any liability.

“The agreement is the result of negotiations following a dispute that has been bitterly contested for five years,” the court said.

According to the decision, counsel in the case estimated that maximum damages to plaintiffs, if successful, would have been between $150 million and $200 million. The settlement represents between 11% and 14.7% of the estimated damages, but the case likely would have spent another three to four years in litigation, with the outcome remaining uncertain.

As a result, the court found that the proposed settlement, which resolves the bank’s potential liability and provides some compensation to shareholders, “appears fair, equitable and in the best interest of the members of the group,” the court said.

Under the settlement, a third of the proposed payout — approximately $7.64 million — will go to the plaintiffs’ lawyers, with the rest paid to shareholders who bought the bank’s stock after December 2015 and held it until March 2017.

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.