Lee recommending the investment without fully disclosing material information and failing to ensure the investment met ACL’s investment needs. Lee’s authority and the high trust placed in his advice. Lee was a fiduciary of ACL, the court noted the scope of Mr. The court noted that determining whether a fiduciary relationship exists between an investment advisor and client requires consideration of the particular relationship. The court followed the test for fiduciary duty described in Abt Estate v Cold Lake Industrial Park GP Ltd., which we discussed in a previous legal update. Lee could not avoid liability by suggesting another party should have intervened to prevent ACL’s loss. Dismissing this reasoning, the court held that Mr. Lee argued that other parties constituted an intervening cause of ACL’s investment losses. Agar was unaware of the risk involved in CMC or Mr. The court did not accept this version of the facts, noting that at the time of the investment, Mr. Agar, and as such, ACL entered into the investment knowing the risk of investing in CMC. Lee argued that ACL’s investment portfolio was managed actively by Mr. Lee had no reasonable basis to believe the representations he made about CMC. Lee had the required knowledge of the falseness of the representation, or recklessness as to its truth. On the second element, the court considered whether Mr. Lee not intending to harm ACL was irrelevant to this aspect of the test for fraud. Lee’s email to ACL constituted fraud, as did an omission as to the nature of the CMC investment. On the first element, the court noted that false representations include express dishonesty as well as deliberate failure to disclose material facts. The court noted the four elements of civil fraud: a) false representation b) some level of knowledge of the falsehood c) the false representation caused the plaintiff to act and d) the plaintiff’s actions resulted in a loss. Lee was its investment advisor, and he improperly recommended an investment in CMC, a company in which he had a personal interest. Lee and Canada Monetary Corp (CMC) relating to two investments ACL made in CMC. v Chun Him Laurence Lee and Canada Monetary Corp., the investment advisor faced liability for fraud and breach of fiduciary duty.Īgar Corporation Ltd. Investment advice carries risk of liability for the advisor, and in Agar Corporation Ltd.
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