A proposed class action against the Ontario Teachers’ Pension Plan Board over its losses on failed crypto platform FTX has been settled — with the pension fund agreeing to spell out improvements to its investment process that it’s adopting in the wake of the incident as part of the settlement.
The Ontario Superior Court of Justice granted a motion to dismiss the case that originally sought damages against the pension fund over its failed US$95-million investment in FTX in 2021 and 2022. FTX filed for bankruptcy less than a year after the investment, amid allegations of fraud and other misconduct.
According to the court, the proposed class action was settled before it reached the certification stage, with the pension fund agreeing to pay the plaintiff’s legal costs (over $650,000), and to publish a statement in its upcoming 2025 annual report confirming that there will be no changes to plan members’ contributions, or to their benefits, due to the write-down of the FTX investment.
After the fraud at FTX was exposed in 2022, the pension giant wrote off its entire investment, but stressed that the loss would have little financial impact, as it amounted to 0.05% of its total net assets.
According to the court’s decision, the statement in the fund’s upcoming annual report will also detail the due diligence process that was followed in making the FTX investment, and changes to the fund’s investment policies and procedures that are being adopted following a review of the episode.
“The communications from the board in the 2025 annual report will describe the outcome of the litigation, the board’s response to the lost investment and enhancements to its investment due diligence processes,” the court said in approving the proposed settlement — adding, “This is an objectively reasonable response and is in the interests of the parties.”
Among other things, the court noted that, during the discovery phase of litigation, the plaintiffs learned the fund was not insured against the loss of its FTX investment, “meaning that the fund itself would be responsible for paying for any damages arising from a successful claim.”
“This led to negotiations and the proposed discontinuance on terms that include communications in the board’s 2026 publications concerning enhancements it plans to make to its processes particularly around founder-managed companies,” the court said.
“In short, the class would not have benefited from an order for reimbursement, and the [pension fund] would have been put to the expense of litigation,” it said. “The discontinuance and the terms are a practical solution to this litigation.”