Provincial government named in Crocus class-action suit
The provincial government has been named as a defendant in the class-action lawsuit over the embattled Crocus Investment Fund.
Norman Boudreau, the lawyer representing Crocus investors, added the province to the $200-million class-action suit in a motion filed in court Monday morning.
The statement of claim alleges, among other things, that the province "did not properly enforce the Crocus Act," and that provincial officials "deliberately ignored multiple warning signs regarding the management of the Crocus Fund."
Boudreau said he believes the province is liable and if it hadn't been named as a defendant, the claim would have been faulty.
The auditor general's report on the Crocus Investment Fund served as the basis for the statement of claim, he said. Provincial auditor Jon Singleton's report found serious weaknesses in the fund's operations and governance, and said all Crocus's investment processes and procedures were significantly flawed.
Bernie Bellan, a spokesman for a group of Crocus investors, says the inclusion of the province in the lawsuit is the final piece of the puzzle.
The suit already names 22 defendants, including the fund itself, Crocus directors and officers, the fund's auditors, two brokerage firms that handled Crocus prospectuses, and the Manitoba Securities Commission.
The claims have not been proven in a court of law. The province has 20 days to file its statement of defence.
Shareholders have more than $150 million invested in Crocus, a labour-sponsored venture-capital fund with a mandate to invest in Manitoba companies.
Trading of Crocus shares halted in December 2004 amid fears they were over-valued.