LONDON, Ont. - 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 (TSX:HCG) 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.
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