Court approves Home Capital’s $29.5-million class-action settlement
LONDON, ONT.—Embattled alternative mortgage lender Home Capital Group is another step closer to rebuilding after an Ontario court approved the settlement of a $29.5 million class-action lawsuit by investors.
Shareholders pulled away from the Toronto-based company earlier this year following allegations by the Ontario Securities Commission (OSC) of misleading disclosure.
Monday’s class-action settlement follows a separate OSC settlement approved earlier this month, in which Home Capital and three former executives agreed they failed to tell investors quickly and completely about fraudulent activity by some mortgage brokers associated with the lender.
About $11 million of the payments being made to the OSC will go toward the $29.5-million class-action settlement.
Each settlement had been conditional on approval of the other.
The OSC’s announcement of its allegations in April contributed to a sudden exodus of Home Capital depositors that pushed the company to borrow about $2 billion at staggeringly high interest rates in order to stay afloat.