You could get part of a new TD mutual funds settlement worth $70 million
A multimillion-dollar class action settlement has been reached regarding TD mutual funds, and Canadian investors could claim a part of it.
The settlement of $70.25 million was reached with TD Asset Management to resolve the claim, which is pending approval by the Ontario Superior Court of Justice during an approval hearing on December 9. Law firm Siskinds LLP brought the lawsuit on behalf of Canadians who held TD mutual funds through discount brokers.
The announcement came on Wednesday, October 9.
According to TD, mutual funds are a type of investment where “the money collected from various investors is pooled together to invest in different assets, including bonds, stocks, and/or money market investments.” Mutual funds are managed by fund managers who allocate the fund’s assets to produce higher returns for investors.
Trailing commissions, or trailer fees, are compensation for mutual fund dealers who advise investors. Over the years, these commissions were also paid to discount brokers.
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These discount brokers operate online, including on BMO InvestorLine, TD Direct Investing, RBC Direct Investing, CIBC Investor’s Edge, Scotia iTRADE, and National Bank Direct Brokerage. However, online-only operators aren’t allowed to provide investment advice.
“It is alleged by the plaintiffs that, since no advice is provided to investors who purchase mutual funds through discount brokers, these investors receive no value for the trailing commissions that reduce the value of their mutual fund investments,” states Siskinds LLP.
“Siskinds LLP has filed proposed class actions against various mutual fund trustees and managers challenging the trailing commissions they have paid to discount brokers on mutual funds under their management. The class actions seek damages for the mutual fund investors.”
You could file a claim if you’ve held units of a TD mutual trust through a discount broker on or after April 9, 2022. Check here to learn more about this class action lawsuit.