Legal Context:

• Action: Plaintiff seeks a global class action under Part XXIII.1 of the Securities Act (OSA), alleging material misrepresentations in Akumin's public disclosures and financial statements.
• Claims:
  • Secondary market misrepresentation (requires leave)
  • Primary market misrepresentation
  • Common law negligence (no leave required)

Akumin’s Background:

• Business: Operates outpatient medical imaging clinics in the US.
• Financial Transition: Moved from TSX to NASDAQ, adopting US GAAP in 2020.
• Major Acquisition: Acquired Alliance HealthCare Services Inc. in 2021 for $820 million USD.

Key Events:

1. August 15, 2021: Delay in Q2 2021 financial results due to potential credit losses.
2. October 12, 2021: Announced errors in AR and PPE requiring restatements for FY 2019, 2020, and Q1 2021.
3. November 8, 2021: Detailed $19 million PPE error.
4. November 15, 2021: Released restated financial statements and Q2 2021 results.

Plaintiff's Allegations:

• Overstated AR, revenue, PPE, and shareholders' equity.
• Non-compliance with IFRS and US GAAP.
• Ineffective internal controls.
• Against EY: No basis for unqualified audit opinions and non-compliance with audit standards.

Court's Findings:

• Expert Evidence: Admitted from both parties.
• Materiality and Public Correction: Established reasonable possibility of success; corrections were made, resulting in share price declines.

Legal Principles:

• Materiality: Objective and context-specific.
• Public Correction: Must be understood as correcting misleading statements.
• OSA Leave Test: Requires good faith and a reasonable possibility of success.

Conclusion:

Leave granted for the secondary market misrepresentation claim under the OSA; class action certified for all claims based on the evidence.

No monetary award specified.