In In re Lions Gate Entertainment Corp.,34 Judge Koeltl, of
the U.S. District Court for the Southern District of New York,
dismissed a proposed secondary market class action alleging that
Lions Gate had failed to disclose a SEC investigation. Lions Gate
had received notices informing it of a SEC enforcement proceeding. The court held that a government investigation, without
more, does not trigger a generalized duty to disclose. The court
held that an issuer has a duty to disclose potential litigation only
if it is substantially certain to occur, and the commencement of an
SEC investigation did not indicate that a SEC enforcement
proceeding was substantially certain to occur.
3. The leave requirement
 Under s. 138.8(1) of the Ontario Securities Act, leave of the
court is required to proceed with a statutory misrepresentation
cause of action under s. 138.3. Section 138.8(1) reads:
138.8(1) No action may be commenced under section 138.3 without leave of
the court granted upon motion with notice to each defendant. The court shall
grant leave only where it is satisfied that,
(a) the action is being brought in good faith; and
(b) there is a reasonable possibility that the action will be resolved at
trial in favour of the plaintiff.
 The statutory causes of action require leave, and the leave
requirement was designed to have a gatekeeper function.35 Leave
is required for each discrete misrepresentation, such that leave
for one allegation of misrepresentation does not mean that leave
is granted for all other allegations of misrepresentation and,
therefore, a plaintiff must lead sufficient evidence to satisfy the
court as to the leave requirement for each discrete allegation of
34 2016 U.S. Dist. LEXIS 7721. See, also, Markman v. Whole Foods Mkt. Inc.,
2016 U.S. Dist. LEXIS 199933.
35 Theratechnologies inc. v. 121851 Canada inc., supra, at para. 36; Abdula v.
Canadian Solar Inc.,  O.J. No. 3517, 2013 ONSC 5035 (S.C.J.);
Ainslie v. CV Technologies Inc. (2008), 93 O.R. (3d) 200,  O.J. No.
4891 (S.C.J.), leave to appeal to Div. Ct. granted  O.J. No. 730, 2009
CanLII 7165 (S.C.J.), appeal discontinued, at paras. 7-13.
36 Drywall Acoustic Lathing and Insulation Local 675 Pension Fund (Trustees
of) v. SNC-Lavalin Group Inc., supra, at para. 34; Musicians’ Pension Fund
of Canada (Trustees of) v. Kinross Gold Corp.,  O.J. No. 6070, 2014 ONCA
901, at paras. 83-87; Trustees of the Millwright Regional Council of Ontario
Pension Trust Fund v. Celestica Inc., supra, at paras. 106 and 123-50.