Investor Recourse: Can I get back lost money?
If you’ve lost money and you think it’s because your investment advisor or firm acted improperly, you have options: from using an ombudsman to going to arbitration or court.
Each option varies based on things like cost, procedures, the amount of time each may take and whether decisions are binding.
The information and links below will help you decide which option works best for you. You can also contact IIROC’s Complaints and Inquiries team (1-877-442-4322 or [email protected]) for information.
Regardless of the option, in all cases the first step should be a written complaint to your investment advisor and their firm. Under IIROC rules, they must provide a response to you within 90 days.
If you aren’t satisfied with their response, one of these options might be your next step:
Options at a Glance
*It is important to understand the time limits for each option.
Free Legal Advice
The Investor Protection Clinics at
Osgoode Hall Law School and University of Toronto Faculty of Law provide free legal advice to investors across Canada who cannot afford a lawyer.
Canadian Investor Protection Fund
Canadian Investor Protection Fund (CIPF) provides protection to investors in the event a firm becomes insolvent or ceases operations due to bankruptcy. CIPF is funded by IIROC-regulated firms and their membership is mandatory.
Ombudsman for Banking Services (OBSI)
If you’ve lost money and you think it’s because your investment advisor or firm acted improperly, you can submit a complaint to the Ombudsman for Banking Services and Investments (OBSI).
Free, independent and informal+
OBSI is a free, independent and informal service for resolving investment and banking disputes. All IIROC-regulated firms are required take part in the OBSI process, and you won’t need a lawyer.
180 days to complain+
First, you need to formally complain to your investment firm. You then have 180 days from the time you receive the firm’s written response to submit a complaint to OBSI. If you are not satisfied with the firm's decision, you may immediately submit your complaint to OBSI. You don’t have to first complain to your firm’s internal ombudsman, which is different from OBSI. A complaint to an internal ombudsman may leave you with less than 180 days to complain to OBSI. Your statutory limitation periods also continue to run, which may impact your ability to commence a civil action. When you complain to OBSI, however, the limitation period is typically suspended if you and your firm enter into a tolling agreement to stop the running of the limitation period while OBSI reviews your complaint.
Decisions are not binding+
OBSI can recommend compensation of up to $350,000. But unlike with arbitration or the courts, OBSI’s decisions aren't binding.
That means a firm can decide to ignore the decision and not pay you the recommended compensation.
Arbitration is like going to court however it is less formal, is usually less expensive and takes less time. Arbitration decisions are final and binding on the parties.
How it works+
You decide if you would like to use arbitration. IIROC investment firms have to participate if you, as a client, choose to use this program.
Under arbitration, you and your investment firm get to decide which arbitrator is best to hear your case, from the list of arbitrators in the program.
The arbitrator acts as a judge and each is completely independent. The arbitrator listens to what both sides have to say, considers the evidence and testimony presented, then makes a legally binding decision.
In some cases, an arbitrator may even help both sides come to an agreement between themselves before a decision is reached – this is called mediation.
Ultimately, arbitrators in the program can award up $500,000, but no more. And under IIROC rules, all registered firms must comply with arbitration decisions.
Who conducts the arbitration?+
IIROC has designated two independent organizations that conduct the arbitrations and supply the independent arbitrators:
In the case of arbitration, you have the option of being represented by a lawyer, a paralegal, or someone else. You can also represent yourself. But remember, firms are always represented by a lawyer, so it’s important to understand the process before deciding how you want to be represented.
If you cannot afford a lawyer, you may contact the Investor Protection Clinics at Osgoode Hall Law School or University of Toronto Faculty of Law which provide free legal advice to investors across Canada.
In addition to legal costs, the organizations administering the arbitration charge arbitration fees. Arbitration fees typically include a filing fee, an arbitrator’s hourly fee and travel costs, a hearing room fee, videoconferencing and other administrative fees. These fees are usually divided equally between both sides. You can also decide ahead of time if you want the arbitrator to award costs – in which case, the losing side pays the other side’s legal costs.
Autorité des marches financiers (AMF)
If you are a Quebec resident who lost money and think it’s because your investment advisor or firm acted improperly, you have the option of using the free services of the
Autorité des marchés financiers (AMF).
How it works+
Like with the Ombudsman for Banking Services (OBSI), with AMF you must first complain to your IIROC-regulated investment firm. If you are not satisfied with your firm's response, you can ask the firm to transfer the complaint to the AMF.
The AMF will assess your complaint and, in some cases, may offer
mediation or conciliation services. It is a voluntary process. You do not need a lawyer for AMF’s services. Filing a complaint with the AMF does not stop the running of your limitation period to start a legal action in court.
Decisions are not binding+
Unlike, for example, arbitration, in the case of AMF, firms are not required to participate. However, firms generally agree to take part.
Legal Action: Going to Court
All investors who believe they lost money because their investment advisor or firm acted improperly have the option of taking legal action.
You are not required to try to resolve your dispute with a firm before taking legal action, but you should be aware of limitation periods on legal action.
This means there are legal time limits and you could run out of time to pursue some of your claims in court.
Unlike options such as arbitration or the Ombudsman for Banking Services (OBSI), there is no limit in the amount of compensation you can claim when taking legal action. There may however be significant legal costs, and litigation can take considerable time.
In addition to your own costs, the courts may decide to make the losing side responsible for paying the winning side’s costs, which can be substantial.