A class action lawsuit seeking $80 million in damages has been launched against the investment adviser charged with the November 2011 murder of Innisfail resident Victoria Shachtay.
A statement of claim filed in Red Deer Court of Queen’s Bench on Monday by Calgary law firm Jensen Shawa Solomon Duguid Hawkes LLP names Brian Malley as a defendant, as well as Malley’s wife Christine, Assante Wealth Management (Canada) Ltd. and Assante Capital Management Ltd. It identifies Allan Rue of Vermilion and David Jamieson of Calgary as plaintiffs, but says the action is being brought on behalf of all Assante clients whose investments were being managed by Malley.
The claim alleges that Malley “disregarded the stated investment goals of the class members . . . engaged in a one-size fits all investment strategy for the class members that was wholly unsuitable for the investors and . . . acted in his own best interests which were in conflict with the interests of his client class members.” A list of specific examples are provided, including failing to obtain informed consent, disregarding instructions and not disclosing conflicts of interest.
The statement of claim also alleges that the Malleys were employed by, agents of, or independent contractors for Assante, with Brian Malley an investment adviser and Christine Malley a manager or supervisor. It says Christine Malley failed to properly supervise accounts and report violations, and that Assante failed to supervise Brian Malley and ensure he was acting properly.
Brian Malley was arrested in May in connection with the bombing death of Shachtay, a disabled single mother who was one of his clients. He’s been released from custody on $10,000 bail, with a preliminary hearing scheduled for next September.
The lawsuit seeks damages of $50 million for losses suffered by Malley’s clients, as well as general damages of $20 million for “mental distress, anguish and hardship” and punitive damages of $10 million for “reprehensible conduct.” It also asks the court to certify the action as a class proceeding and direct that the damages awarded be paid into a common fund for distribution to the members of the class action.
Statements of claim contain allegations that have not been proven in court.
Assante said in a written statement Tuesday afternoon that it had not yet been served with a statement of claim, but that in its experiences it would be “extremely unusual to advance such claims through a class action proceeding.” It added that it would review the claim and respond at the appropriate time.
Assante also said it’s been working with clients and former clients to resolve matters related to the handling of their accounts by Malley, and that it would continue to do so.
Rob Armstrong, a partner with Jensen Shawa Solomon Duguid Hawkes, said the class represented in the action must still be approved by the court. Anyone who falls within that class would automatically be included, he said, unless they chose to opt out.
“Our firm personally has spoken with about 80 investors,” said Armstrong.
It organized a meeting of affected people in Red Deer on Sept. 17, and is now planning another for Rocky Mountain House this month.
Armstrong said the damages being claimed could change as more information becomes available.
“At this point it’s a very rough extrapolation of what we’ve heard in terms of the range of individual losses, coupled with the very limited information that we currently have on the numbers of people affected.”
One of Malley’s former clients, a Red Deer businessman who did not want to be identified, said he’s pleased that a lawsuit against the Malleys and Assante has commenced. Those who attended the Red Deer meeting were also appreciative, he said.
“If you were at that meeting, it’d break your heart,” said the man, describing how some of the investors are in a very difficult financial position.
He’s optimistic about the lawsuit’s chances of success, but worries that relief might come too late for some.
“I’m concerned it’s going to take a while yet.”
hrichards@www.reddeeradvocate.com