An Ontario court has approved the settlement of a $29.5 million class-action lawsuit by investors against alternative mortgage lender Home Capital Group Inc.
The Ontario Securities Commission approved a settlement earlier this month with the Toronto-based company and three former executives who 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 Toronto-based company to borrow about $2 billion at staggeringly high interest rates in order to stay in business.
Home Capital shares and prospects have improved since billionaire investor Warren Buffett agreed to support the lender through an equity investment and loans by Berkshire Hathaway, his main company.