Money Concepts Settlement
UPDATES
UPDATE (December 5, 2013): Class Action Settlement Approved!
On December 5, 2013, The Honourable Mr. Justice Edwards approved this class action settlement.
Those eligible for compensation should receive settlement funds by mail from the Administrator near the end of December 2013.
UPDATE (November 26, 2013): The Administrator will be sending out a letter to all claimants later in September. The letter will update claimants on the outcome of the motion and will provide more information about how a claimant's compensation was calculated, along with information about the Challenge process. The resumption of the motion for Settlement Approval has now been scheduled for 9 AM on Thursday, December 5, 2013, BUT ON NOVEMBER 25, 2013, WE WERE ADVISED BY THE COURT THAT THE COURT HAS CHANGED THE VENUE TO THE NEWMARKET COURTHOUSE AT 50 EAGLE STREET WEST IN NEWMARKET.
UPDATE (August 19, 2013): The Honourable Justice Edwards released his decision regarding approval of the settlement on Friday, August 16.
Justice Edwards determined that the total amount of the settlement was fair and reasonable for the class as a whole. He also found that the proposed legal fees submitted by class counsel were fair and reasonable under the circumstances.
As you know, some persons objected to the settlement on the basis that the total amount recovered, for the entire class, was insufficient. The court rejected that objection.
The court also refused the claims advanced by persons after the claim deadline.
The court, despite the objection of class counsel, allowed some of the relatives of Mr. Karas and Mr. Stephenson to advance claims for compensation.
The court, however, agreed with some concerns raised by some objectors about the challenge process as it relates to individual claimants. As a consequence, the settlement was, unfortunately, not finalized and any pay-outs will be delayed.
Instead, Justice Edwards adjourned the motion for approval of the settlement so that class counsel and the administrator, together with the lawyers for the defendants and their insurers, can implement a challenge process for persons who object to the discreet amount otherwise payable to them, individually, under the settlement. Once this process is agreed upon and implemented we will return to the court and seek final approval so that payments can be made to individual class members. At that time, the court will only deal with issues relating to procedural fairness and not any issues relating to the total amount of the settlement payout. There may be adjustments in everyone's individual amounts depending on the results of any particular review, since the total amount available for distribution is now essentially fixed. In light of this ruling, we do not expect to be able to pay out any monies until early next year.
We hope that we can implement this process this fall and attend back before the court before the end of the year for approval. We will keep you updated via posts on this website and with individual mailings, when appropriate.
UPDATE (July 17, 2013): We still await a decision from the Court. The decision will be posted here when it is released. We are hoping to have a decision in the next few weeks but note that the timing of the decision is completely out of our control.
UPDATE RE: MOTION ON JUNE 7, 2013: The Plaintiff’s Motion for Settlement Approval was heard before The Honourable Mr. Justice Edwards on June 7, 2013. The Judge advised that he will be considering his decision and will likely issue it in the next few weeks. Once a decision is released it will be posted on this website along with any other applicable information.
We ask that you do not call for updates, as there is no information whatsoever available by way of update other than the information above. If the settlement is approved, then compensation will likely follow to class members eligible for compensation within approximately 6 weeks thereafter.
UPDATE (March 6, 2013): The Class Action Administrator is in the process of preparing and sending out letters to Claimants about their claims and how their claims have been evaluated pursuant to the class action settlement, which is all subject to Court approval.
Click here to review the Settlement Agreement that may be referenced in the letters from the Administrator.
If you have submitted a Claim Form, please wait for your letter from the Administrator (which you will receive by April 5, 2013) before contacting us with questions about the Settlement Agreement or its impact on your claim.
UPDATE (March 5, 2013): The deadline to submit Claim Forms has now passed.
Anyone who has submitted a Claim Form to the Class Action Administrator before the deadline should receive a letter from the Administrator by April 5, 2013.
Please wait for the letter from the Administrator rather than calling for updates.
UPDATE (November 27, 2012): We are pleased to announce that, subject to Court approval, a settlement has been reached in the Class Actions against David Karas and James Stephenson.
A motion for Court approval of the Settlement has been scheduled for June 7, 2013, in Oshawa.
Click here to review the Full Notice in order to learn more about the settlement and your options.
Click here to access the Claim Form that must be submitted by claimants to the Administrator by no later than February 28, 2013. (See FAQs for more information)
To review the Orders for Directions by the Judge in relation to this Notice and the Motion for Settlement Approval click on the links below:
- Order for Directions (French - as issued and entered)
- Order for Directions (Smith - as issued and entered)
To contact the Administrator, contact:
Crawford Class Action Services
3-505, 133 Weber St. N.
Waterloo, Ontario N2J 3G9
Tel: 1-877-739-8936
Fax 1-888-842-1332
[email protected]
Money Concepts FAQ
I have received a letter confirming I am getting compensation and specifying an amount. Is that amount after litigation costs?
Yes. The amount stated is your letter is the amount you will receive (i.e. after all lawsuit and administrator related costs have been paid).
How were the minimum compensation amounts calculated?
The minimum compensation calculation amounts are a conservative estimate of what you can expect to receive if the settlement is approved by the Court. The amounts were calculated in accordance with the terms of the Settlement Agreement. You should review the Settlement Agreement to better understand how that was calculated, but, for illustration purposes below is an example of how the calculations were made:
STEP 1 – Calculate the Claimant’s Unadjusted Claim Amount
The defendant’s database was used to determine the amount of losses suffered by the claimant–the losses being the calculated estimated amount of interest paid up until the crystallization date plus any losses (or less any gains) on the leveraged investments.
Specifically, these losses are calculated in accordance with the Settlement Agreement, as follows: Calculate the Claimant’s Unadjusted Claim Amount = Claimant’s Total Estimated Interest Paid plus the Claimant’s Total Estimated Net Leveraged Investment Loss (Gain). The Claimant’s Total Estimated Interest Paid is defined as the estimated amount of interest paid on verified loan amounts up until the class member’s funds were transferred out of Investia’s control or the date of the branch’s closure, whichever was earlier. The Claimant’s Total Estimated Net Leveraged Investment Loss (Gain) is defined as the estimated amount lost or gained on class member’s verified leveraged investments up until the class member’s funds were transferred out of Investia’s control or the date of the branch’s closure, whichever was earlier.
STEP 2 – Calculate the Claimant’s Unadjusted Claim Total Amount
Adjust the losses to address loan data and losses not necessarily in the defendant’s database (by topping up the claimant’s losses by 15% where they qualify for the top up).
Specifically, in accordance with the Settlement Agreement, calculate theClaimant’s Unadjusted Claim Total Amount which equals the Claimant’s Unadjusted Claim Amount plus any Validated Unidentified Loan Top up. If someone indicated on their claim form and attached documents to establish that they had loans (like Manulife loans for segregated investments) or had used a home equity line of credit , then a 15% top up (of the Claimant’s Unadjusted Claim Amount) was applied for “Validated Unidentified Loans” and added to the Claimant’s Unadjusted Claim Amount.
STEP 3 – Calculate the Claimant’s Compensation
Determine the Claimant’s Compensation by multiplying the Claimant’s Unadjusted Claim Total Amount (calculated in Step 2) by the Resolution Adjustment Factor. The Resolution Adjustment factor is simply the percentage of losses recoverable by claimants from the settlement having regard to the amount of the settlement and the total amount of valid claims.
Specifically, in accordance with the Settlement Agreement, the Resolution Adjustment Factor (the pro-rata share) is calculated by taking into account all eligible Claimant’s Unadjusted Claim Totals and dividing it by the total amount of settlement funds available.
For the purpose of the minimum calculations a Resolution Adjustment Factor of 20% has been used. The final Resolution Adjustment Factor may increase slightly once issues relating to the inclusion of a few potential class members in the settlement are resolved.
EXAMPLE: Hypothetical amounts used
Step 1 – Calculation of Unadjusted Claim Amount
Total Estimated Interest Paid of $25,000
PLUS
Net leveraged investment loss of $5,000
=Estimated Losses of $30,000.
Step 2 – Calculation of Unadjusted Claim TOTAL Amount
Unadjusted Claim Amount of $30,000
PLUS
Validated Unidentified Loan Top Up of 15% ($4,500)
=Total estimated losses of $34,500
Step 3 – Calculation of Minimum Compensation
Calculation of Unadjusted Claim TOTAL Amount
multiplied by
The Recovery Adjustment Factor (the pro-rata recovery factor, calculated at 20% for the purposes of minimum calculations):
=$6,900 ($34,500 x 20%)
What kind of proof should I attach to the Claim Form to confirm I have loans from segregated funds?
Those claiming to have loans in relation to segregated funds should attach to their completed Claim Forms any documents you have that will help verify you had such loans, often loans with Manulife. Examples of such documents may include documents from Manulife confirming these loans or information from the Money Concept worksheets that they often gave to clients that show loans from Manulife or loans for other segregated investments. You are required to attach your proof using the documents you have in your possession or to take steps to obtain any such documents (regardless of whether you may have previously sent documents to Doucet McBride or to Thomson Rogers).
What do I do if some or all of my accounts are in my name and my spouse's name?
If some of your accounts are jointly held with a family member, please make sure the Claim Form is signed by both of you. So long as both of your names and signatures are on the Claim Form the Administrator will consider all accounts held by either of you, or both of you.
What about compensation for the other products I was sold by the Defendants?
The settlement does not separately compensate you for amounts spent on other products sold to you by defendants, except in so much as those costs may have been paid directly out of your leveraged investment portfolio (and hence reflected in a calculation of your leveraged losses/gains).
Will I receive more information about the settlement?
Please monitor this website for more information. Everything will be posted here.