One of Canada’s leading class action lawyers is searching for shareholders to sue Taseko Mines Ltd. (TSX:TKO) regarding its Prosperity project.
In an interview with Business in Vancouver, Merchant Law Group LLP principal Tony Merchant said his firm plans to launch a notice of claim against the company sometime this month.
“We believe that we can establish the failure to disclose inside information, or to put it different, to secretly deal with inside information other than putting it into the market,” Merchant said.
The suit, which has yet to be filed and needs certification from a judge in order to make it a class proceeding, is directly related to Taseko’s Prosperity project near Williams Lake.
The federal government rejected the proposed copper-gold mine in November citing environmental concerns (see “Full Disclosure: Chasing Prosperity” – issue 1101; November 30-December 6, 2010).
According to Merchant’s website, the class action suit “will seek financial compensation for Taseko shareholders who suffered losses relating to the proposed Prosperity copper-gold mine.”
The website includes a form for shareholders who wish to join the class action.
Taseko could not be reached for comment.
Merchant claims to have more ongoing class action lawsuits than any other law firm in Canada, and has concluded suits against media baron Conrad Black’s Hollinger Inc., Maple Leaf Foods and Molson-Coors Brewing Co. (NYSE:TAP).
Although he remained guarded about what details against Taseko the claim would include, Merchant did say the suit was the result of two shareholders who approached him.
He added that it was related to the company’s much reported October stock activity.
On November 25, the British Columbia Securities Commission said it was reviewing trading in Taseko’s shares.
Days before that, media sources reported that Canadian securities regulators were investigating the possibility that a ministerial leak had caused Taseko’s stock to plummet three weeks before Ottawa rejected its $800 million project.
On October 14, Taseko’s stock dropped 10.52% to $6.28 on no news from the company.
Trading volume for the day totalled approximately 7.5 million shares, more than seven times the average volume during the previous five days of trading.
Media sources have also reported that illegal insider trading allegations in Taseko stock have been referred to the RCMP.
Last week, Taseko president and CEO Russ Hallbauer issued a statement saying the company expects to submit a revised proposal for Prosperity to federal authorities to address the government’s environmental concerns.
The company did not say when the proposal would be submitted.
At press time, Taseko’s shares were down $0.05 to $4.93.