Now that the Third Party Claims against ParkLane’s Distributors have been stayed, the Action will be proceeding to the next steps in the litigation. This will involve an exchange of all relevant documentation between the parties, followed by examinations for discovery (depositions) of all the parties. This will be a lengthy and time consuming process.
Further updates will be made as significant steps are reached.
This class action was commenced on September 18, 2008. The law firms Paliare Roland Rosenberg Rothstein LLP and Landy Marr Kats LLP are class counsel.
In 2005, 2006, 2007, 2008 and 2009, ParkLane offered a charitable tax shelter opportunity (the “Gift Program”) sold through financial advisors to Canadians. The claim alleges that the Gift Program was created for the purpose of enriching the promoters.
The promoters of the Gift Program represented to donors that for every $2,500 donation, that donation would be matched three times over by a Trust with a funding commitment of $200 million, whose purpose was to “promote charitable giving in Canada”. In other words, for every $2,500 donation, a Canadian charity would receive $10,000, and the donor would receive a charitable tax receipt for $10,000. However, CRA has disallowed the charitable deductions in full, including the amount actually paid out of pocket by the donors. In fact, the charities kept only 1% or less of the amount for which they issued receipts, and the rest was used to pay the promoters, and to purchase a royalty agreement under the terms of which the charity was supposed to receive an interest in a possible revenue stream to be generated by a computer software program trading futures contracts on a highly leveraged basis.
This fact was not disclosed to the Gift Program participants, and in fact Trafalgar Trading has not been conducting the trading that it said it would be conducting under the royalty agreements. To date, since 2005, the charities have only received approximately an additional 1% of the amount they paid for the royalty agreements as “trading profits”.
Restitution is being sought for the Class Members of the money they paid into the Gift Program, as well as damages for the penalties and interest that CRA charged when it reassessed the Class Members’ income tax returns.
The remaining Defendants in this case include the promoter, ParkLane, its affiliated companies, and a Bermuda Trust, all of whom worked together to offer the Gift Program. The Defendants all deny the allegations made in the claim.
If you are a donor who participated in the Funds for Canada Gift Program between 2005 and 2009, and did not exclude yourself from the Class by the opt out deadline (February 22, 2013 for everyone but Distributors) you are automatically included in the Class.
If you have not been receiving notices from Class Counsel or the Notice Administrator, please contact us with your updated contact information.