# MFC class action.



## agent99 (Sep 11, 2013)

Just tried to scan the class action claim info that came in the mail yesterday. My wife bought MFC in 2007 and sold it in 2015. So I guess she qualifies. But just 300 shares in RRSP/RRIF. Probably paid about $40 and sold at about $20 . Not a good investment! 

Will probably file the claim, but not sure it will be worth the effort. Anyone figured out a simple way of calculating what the settlement might amount to? Presumably depends on how many qualify?


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## james4beach (Nov 15, 2012)

Curious, what was Manulife guilty of? (Or what did they make a settlement for, to avoid a court case). Did they (allegedly) misrepresent their financial situation and mislead investors?


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## OptsyEagle (Nov 29, 2009)

james4beach said:


> Curious, what was Manulife guilty of? (Or what did they make a settlement for, to avoid a court case). Did they (allegedly) misrepresent their financial situation and mislead investors?


They were guilty of having their stock go down enough for the lawyers to make some money on it.

I tend to find that they will probably send you a cheque for $3.62. The lawyers don't do this stuff for the investor they do it for the 1/3rd of the settlement proceeds. It is an easy extortion because the management don't pay it either. so after an appropriate time of negotiations, the companies lawyer pays the plaintiffs lawyers the money everyone knew was going to be extorted in the first place. 

The shareholders pay it to the shareholders with the lawyers grabbing 1/3rd of it along the way. Man, does that ever teach someone a big lesson or what?


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## james4beach (Nov 15, 2012)

OptsyEagle said:


> They were guilty of having their stock go down enough for the lawyers to make some money on it.


That wouldn't be why someone reaches a settlement... I looked it up. The settlement is because they did not fully disclose risks in some of their products, segregated funds and variable annuity products.

As a shareholder, don't you want the company to properly disclose the risks of their balance sheet to you?


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## OptsyEagle (Nov 29, 2009)

james4beach said:


> That wouldn't be why someone reaches a settlement... I looked it up. The settlement is because they did not fully disclose risks in some of their products, segregated funds and variable annuity products.
> 
> As a shareholder, don't you want the company to properly disclose the risks of their balance sheet to you?


No that is the excuse the lawyers used to extort the money. If they had of disclosed that, the lawyers would have found something else.

Anyway, it is what it is.


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## agent99 (Sep 11, 2013)

OptsyEagle said:


> The shareholders pay it to the shareholders with the lawyers grabbing 1/3rd of it along the way. Man, does that ever teach someone a big lesson or what?


Shareholders do end up paying shareholders for the settlement. However, only those shareholders who *bought* shares at the time the company management misrepresented the risks will receive compensation. Management who did the misrepresentation and who shareholders elect, presumably get off scott free? 

If I understand the settlement, it is for $69Million. Of that it seems lawyers of various types get about $25Million. The rest gets distributed on a pro-rata basis, but even that is complex, because it depends on just when you purchased/sold. It will be interesting to see how much of the $20/share my wife lost will be paid back.

Not holding my breath, but I did receive a settlement in another class actio where Pioneer were apparently price fixing in Eastern Ontario. I think I got back about $50 of the $1000 or so I spent at local station! 5c/L?

I have another outstanding action regarding the takeover of Baffinland Iron Mines. It did seem like our shares got stolen from us! That ones has been ongoing for some time! 

Finally, we have one relating to our diesel Mercedes. Not sure if it is going anywhere although it should. The diesel VW guys certainly got a good settlement! Lawyers earned their keep on that one.


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## OptsyEagle (Nov 29, 2009)

agent99 said:


> Shareholders do end up paying shareholders for the settlement. However, only those shareholders who *bought* shares at the time the company management misrepresented the risks will receive compensation.


That is just about every shareholder who owned the stock. They had been "misrepresenting" the so called issue since the beginning of their existence. If some other part of Manulife's business, that they have not gone into detail about to shareholders, had of been the problem, that would have been what the lawyers identified to extort the money in question.

$3.62 is my guess. Let us know what you actually get. Should be about 2 years from now. I think I have been generous and would be interested to know the actual number.

As I said, this is all about the lawyers.


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## agent99 (Sep 11, 2013)

OptsyEagle said:


> That is just about every shareholder who owned the stock.


So you are saying that every shareholder that owned the stock purchased stock between 2004 and 2009 ?????????????????????????????? 

The claimed misrepresenation was during the 2008 financial crisis. Not since "beginning of existence"! Have you actually_ read_ the class action????



> The plaintiffs claim that Manulife misrepresented and failed to disclose the size of the company’s exposure to equity markets *during the financial crisis of 2008.* The class period starts on April 1, 2004 and runs until Feb. 12, 2009, which was the day that Manulife ultimately disclosed the extent of its losses during the 2008 fiscal year. Manulife shares plummeted in the days following the Feb. 12 announcement.


Anyway, claim completed and ready to be mailed.


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## OptsyEagle (Nov 29, 2009)

No I have not read the claim. Why would I. You asked if it was worth it and I gave you my estimate from my experiences with these things and then added some personal opinion about the overall system. A system that takes a business mistake, that all businesses do from time to time, and basically extorts money from one group of shareholders, who had nothing to do with the mistake, and gives it to another group of shareholders who would have made the same investment decisions even if they understood the situation, in the first place. In both cases, the amounts are fairly meaningless, but the lawyers make out like bandits, which is why they do it. Can't blame all the parties involved, grabbing cash that is easily available, but that does not make it right.

Filling out the form or not filling it out will not change Manulife's payout or the system so, good for you and please let us know how it turns out. I have filled them out before as well, but as I said, they return a cheque that is usually a little embarrassing to cash...many moons later.


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## agent99 (Sep 11, 2013)

OptsyEagle said:


> No I have not read the claim. Why would I. You asked if it was worth it and I gave you my estimate from my experiences


Made your estimate without reading the claim or settlement?? That is hard to do. Well done!


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## OptsyEagle (Nov 29, 2009)

agent99 said:


> Made your estimate without reading the claim or settlement?? That is hard to do. Well done!


Hey, you were the one that couldn't do the math when the numbers in front of you. Well done yourself.


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## agent99 (Sep 11, 2013)

OptsyEagle said:


> Hey, you were the one that couldn't do the math when the numbers in front of you. Well done yourself.


I couldn't do it, because I have no idea how many shares were bought during the claim period, how many claims will be submitted nor on which dates the claim shares were purchased and sold (this affects the payout) But you were able to do the calculation without knowing that or even reading the claim. Amazing!! Cut the crap!

BTW, entire settlement will be covered by insurance.


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## Mukhang pera (Feb 26, 2016)

I tend to think that Optsy is right. The principal beneficiaries in class actions are the lawyers. They spend time looking for potential claims, then beat the bushes to find a "representative plaintiff" who will receive almost nothing apart from a fee for acting as plaintiff.

Here are a few of hundreds of B.C. cases in recent years, giving an idea of who gets what:

_Schimpf v. Samsung Electronics Co. Ltd., 2015 BCSC 2154_

This class action settled for $4.9 million and the court approved a counsel fee of $784,416. A few passages from the judgment follow:

[4] The action is brought on behalf of direct and indirect purchasers of SRAM (static random access memory) and asserts collusion by the defendants in committing anti-competitive acts in relation to the price of SRAM. SRAM is used for a variety of applications. It is used as Level 1, 2, or 3 cache on the motherboards of computers, including servers, and is used in cellular telephones and other handheld devices. SRAM is also used in video game consoles.

[5] The defendants are manufacturers, sellers or distributors of SRAM. The defendants during the class period were engaged in the business of marketing and selling SRAM around the world, including in Canada.

[41] The amount per Eligible SRAM Product is calculated by multiplying the estimated cost of SRAM in products of that type by the fraction of products of that type that contain SRAM. For example, 45% of desktop computers contain SRAM, and those that do contain an average of $11.24 of SRAM. Thus, each desktop computer purchased in the class period adds $5.06 ($11.24 multiplied by 0.45) to a class member’s Total SRAM Sum.

[42] Under the Distribution Plan, the sum payable to each class member is his, her, or its Total SRAM Sum, subject to the following:

(a) only shares of $25 or more will be paid out;

[51] Mr. Schimpf seeks an order approving the payment of $3,000 for undertaking the role and responsibilities of the representative plaintiff. He took on the role some three years ago, as the former representative plaintiff was unable to continue. He has a knowledge and interest in computers and holds a diploma in network and telecommunications engineering.

[52] He did not make large SRAM or SRAM product purchases and as such is unlikely to receive compensation from the distribution process, or if he does receive compensation it will be likely be the minimum amount of $25.

http://www.courts.gov.bc.ca/jdb-txt/sc/15/21/2015BCSC2154cor1.htm

Another case of the same type, with a lot more money on the table, would be:

_Pro-Sys Consultants Ltd. v. Infineon Technologies AG, 2014 BCSC 1936
_
PRACTICE — Class actions — Settlement — Approval — • Solicitor’s fees — Court granting approval of final settlements in complex, hard-fought, lengthy class action related to claims arising from a large scale price-fixing conspiracy against manufacturers of dynamic random access memory — Final settlements totalling $12,195,000, in addition to $67,725,000 previously approved — Court approving innovative complex distribution protocol designed by parties with assistance of an economist and senior counsel, to address payments to different categories of class members — Court approving administration protocol and appointment of claims administrator and referee — Court also approving counsel fee of $16,851,367, in addition to $5,815,000 previously approved, plus disbursements.

http://www.courts.gov.bc.ca/jdb-txt/SC/14/19/2014BCSC1936.htm

The lawyers take home more than $22 million. Some insight as to the dividend for class members can be seen in this passage of the judgment:

[42] The Administration Protocol contemplates two claims processes: a simplified process for End Consumers who elect to claim the $20 minimum, and a more in-depth process for all other claimants and for End Consumers who purchased sufficient amounts of DRAM to claim more than $20. In both instances, claims will be filed via an online claims portal unless a class member does not have Internet access.

Yup, many claims will amount to $20. 

Or how ‘bout this gem:

_Steele v. Toyota Canada Inc., 2015 BCSC 1014
_

PRACTICE — Class actions — Settlement — Approval — • Solicitor’s fees • Representative plaintiff — Compensation — In class action which alleged a retail price maintenance scheme, court approving settlement which would see each class member receive a voucher of $125 to spend at defendants' authorized car dealerships — Court also approving class counsel fees of $980,000, representing 20% of maximum settlement amount, plus taxes and disbursements — Three representative plaintiffs each entitled to honorarium of $3,000.

So the plaintiffs each get the princely sum of $125. The lawyer gets $980,000. 

http://www.courts.gov.bc.ca/jdb-txt/SC/15/10/2015BCSC1014.htm

Herewith another:

_Stanway v. Wyeth Canada Inc., 2015 BCSC 983_

PRACTICE — Class actions — Settlement — Approval — • Solicitor’s fees — Court approving settlement of class action related to defendant pharmaceutical companies’ hormone replacement products — Court considering, inter alia, the size of the $13.65 million settlement, that success and recovery were not guaranteed if the matter went to trial, the claimants' average age of 71, the extensive discovery and expert evidence gathered over the 10-year history of the lawsuit, and the opposition of about 12 out of 1,100 class members — Court also approving class counsel fees based on 33.3% of the settlement, which, with disbursements and interest amounted to 43% of the settlement.

Here, the legal costs add up to 43% of the settlement of $13.65 million. With 1,100 class members to share a pie of 57% of $13.65 million, class members will each get about $7,000. I think I’d rather be the law firm and get closer to $5 million.

http://www.courts.gov.bc.ca/jdb-txt/SC/15/09/2015BCSC0983.htm


I’ll toss in one more:

_MacKinnon v. National Money Mart Co., 2010 BCSC 1008
_
PRACTICE — Class actions — Settlement — Approval — • Representative plaintiff — Compensation — In “payday loan” class action, court approving settlement worth about $25.75 million, including provision for a 30% fee to class counsel — Court awarding compensation of $7,500 to each of 2 representative plaintiffs, taking into account their efforts in litigation that was the vanguard of class action payday loan litigation, pursued vigorously for more than 7 years, and their assistance in shaping the terms of the settlement agreement — Plaintiffs’ compensation to be paid as a disbursement.

In MacKinnon, the plaintiff sought restitution and damages for certain cheque cashing fees collected on short-term loans made by the defendants.

[9] Mr. MacKinnon alleged such fees were "interest" and, when added to the interest rate charged by the defendants on the principal amount of the loans, were in excess of that permitted to be charged and hence were contrary to s. 347(1) of the Criminal Code.
[33] The principal terms of the Settlement Agreement provide:

(a) for the creation of a settlement fund in the amount of $24.75 million which represents approximately 19% of the estimated $130 million in cheque cashing fees collected by Money Mart in relation to its payday loan operations in B.C.;

(b) each class member is entitled to receive the full amount of their claim for cheque cashing fees paid if the fund is large enough to pay all the claims and on a pro rata basis if it is not;

(c) the settlement fund and the payment of benefits from it is to consist of 50% cash and 50 transaction credits which are fully redeemable for cash three years from their issuance to claiming class members;

Just how much would you expect the average class member to receive? Peanuts, I dare say. Certainly a sum that would pale in comparison to a legal fee amounting to 30% of $24.75 million.


http://www.courts.gov.bc.ca/jdb-txt/SC/10/10/2010BCSC1008.htm


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## OptsyEagle (Nov 29, 2009)

agent99 said:


> I couldn't do it, because I have no idea how many shares were bought during the claim period, how many claims will be submitted nor on which dates the claim shares were purchased and sold (this affects the payout) But you were able to do the calculation without knowing that or even reading the claim. Amazing!! Cut the crap!
> 
> BTW, entire settlement will be covered by insurance.


Then why did you ask if I had read the claim. 

I gave you an estimate from my experience with these things. It was a wild guess to make my point that it can never, ever amount to very much. It is not how this extortion process works. The lawyers know that if they sue for many hundreds of millions, they can extort a much smaller amount of money from the company, very quickly and very easily. If they tried to get a lot more, not only would it drag on but it would definitely go to court. Since there is a very good chance that the courts would find that the investor was primarily responsible for their own losses, that is not something they want to do. Since the smaller settlement makes them rich and is easy to get, they take it since they couldn't care less about the investors and probably agree, they were responsible for their own losses. That is how it works and why I doubt you will see more then $5.

Now my opinion was directed towards the overall lawsuit issue in hopes of helping others understand what it really is and what it doesn't ever do for the investor. For some reason you seem to have taken it personally, so I will try to remember your sensitivities in the future, if I ever decide to respond to any of your posts again.


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## agent99 (Sep 11, 2013)

OptsyEagle said:


> Then why did you ask if I had read the claim.
> .


I should not have asked that question, because the answer was obvious.


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