An Ontario court has appointed a law firm to represent investors in the wind-up of failed brokerage firm PACE Securities Corp. The firm’s former parent company, PACE Credit Union (PCU), is to propose a settlement for investors impacted by the firm’s bankruptcy.
On Aug. 6 at the request of Ernst & Young Inc. (EY) — which is the liquidator of PACE Securities and related firms — the Ontario Superior Court of Justice issued an order appointing Toronto-based Paliare Roland Rosenberg Rothstein LLP to represent investors in the wind-up proceedings.
In its latest report on the liquidation proceeding, EY supported the appointment of Paliare Roland as counsel to investors, saying it would allow for investor claims to be addressed “in an efficient, timely and consistent manner” and ensure that all investors have access to the process.
“The investor claimants comprise over 700 individuals, many of which are of retirement age, likely have limited ability to mitigate their investment losses, and would have difficulty assessing or enforcing their legal position and options without the benefit of legal advice and representation,” EY also noted.
Investors who want to pursue their own claims will be able to opt out of the collective arrangement.
The court order also granted the credit union exclusive authority to design and propose a settlement for investors by Oct. 15.
Vaughan, Ont.-based PCU said on Monday that it plans to propose a settlement package for investors in the wind-up of the investment firm, and that it will “explore recovery options” for investors that have faced financial hardship.
“We understand this settlement process will be complex, being a multi-party proceeding, and will also require speed and care. But we are here for our members, every step of the way. We are committed to making every effort to find recovery options for our members,” said Barbara Dirks, president and CEO of PCU, in a statement.
Back in June, the Investment Industry Regulatory Organization of Canada alleged misconduct by a pair of former executives of PACE Securities involving the sale of proprietary products by the firm.
Those allegations have not been proven. An appearance to set a date for a hearing is slated for Aug. 17.