Canadians could soon cash in on $8.5 million TD mutual funds settlement

Canadians could soon claim a part of a proposed settlement over TD mutual funds.

Kalloghlian Myers LLP announced on Friday that a $8.5 million class action settlement has been reached with TD Asset Management Inc.

The class actions allege that the defendants’ payments of trailing commissions to discount brokers from the mutual funds were “improper” and caused investors to “suffer diminished returns on their mutual fund units,” according to the law firm.

According to TD, mutual funds are a type of investment where “the money collected from various investors is pooled together to invest in different assets, including bonds, stocks, and/or money market investments.” Mutual funds are managed by fund managers who allocate the fund’s assets to produce higher returns for investors.

Trailing commissions, or trailer fees, are compensation for mutual fund dealers who advise investors. Over the years, these commissions were also paid to discount brokers.

Who’s eligible for the proposed settlement?

The proposed settlement will resolve the claims made on behalf of anyone (no matter where they live) who held or holds units of TD mutual fund trust at any time on or before September 11, 2024.

Class members do not include investors who held mutual funds through a discount broker, the law firm notes.

The settlement is still subject to approval by the Ontario Superior Court of Justice. A hearing has been set for January 23, 2025.

If you want to object to the TD mutual funds settlement, the counsel’s fees and disbursements, the payment of an honorarium, or the distribution protocol that decides how the settlement funds will be distributed among class members, the law firm advises you to do so by December 23.

If you don’t want to be a part of the class action and be bound by the terms of the settlement, the law firm says you must opt-out by submitting a form by December 31.

More information about the settlement and the opt-out form can be found here or by calling class counsel at 647-969-4472.

What if you held units of TD mutual funds through a discount broker?

A $70.5 million class action settlement was reached with TD Asset Management in October.

This lawsuit was brought on behalf of Canadians who held TD mutual funds through discount brokers.

These discount brokers operate online, including on BMO InvestorLine, TD Direct Investing, RBC Direct Investing, CIBC Investor’s Edge, Scotia iTRADE, and National Bank Direct Brokerage.

For more on this settlement, read this.

With files from Irish Mae Silvestre