As explained below, there are discrete reasons for concluding
that for each of the five misrepresentations, there is no reasonable
possibility of success. There is also a fundamental weakness in Mr.
Paniccia’s statutory cause of action that applies to all of the
alleged misrepresentations. The fundamental flaw is all the
alleged misrepresentations want for materiality.
 Determination of materiality of financial data is typically
a matter for the auditor’s professional judgment,46 and the
defendants submit that in the immediate case, the want of materiality is demonstrated by the fact that BDO has not withdrawn
their unqualified audit opinions nor required a restatement of
MDC’s financial statements for any of the years 2012 to 2016 and
BDO has not withdrawn its ICFR reports for any of the years
2012 to 2016, and it is demonstrated by the fact that the SEC did
not require any restatements. Further, the defendants go further
and submit that the absence of any restatements from BDO
precludes Mr. Paniccia from arguing that the alleged misrepresentations by omission are misrepresentations of material facts.
 I agree with the defendants that the absence of restatements has evidentiary value in the assessment of materiality, but
I disagree that the absence of restatements precludes a finding
that a material fact was misrepresented. As Justice Rothstein
noted in Sharbern Holding Inc. v. Vancouver Airport Centre Ltd.,
supra, evidence of concurrent or subsequent conduct or events
that would shed light on potential or actual behaviour of persons
in the same or similar situations is relevant to the materiality
assessment. However, he emphasized that the predominant focus
must be on a contextual consideration of what information was
disclosed, and what facts or information were omitted from the
disclosure documents provided by the issuer.
 The defendants are correct that in the absence of a restatement, an acknowledgement, a criminal or regulatory finding, or
a qualified audit report, Mr. Paniccia must adduce some evidence to
show that he has a reasonable prospect of successfully demonstrating at trial that there was a misrepresentation of a material fact,
but that is not to say the absence of a restatement, an acknowledgement, a criminal or regulatory finding, or a qualified audit
report precludes him proving in some other way that there was
a misrepresentation of a material fact. In my opinion, in the
46 Livent Inc. (Special Receiver and Manager of) v. Deloitte & Touche, 
O.J. No. 1635, 2014 ONSC 2176 (S.C.J.), at para. 104, affd (2016), 128 O.R.
(3d) 225,  O.J. No. 51, 2016 ONCA 11, vard  2 S.C.R. 855,
 S.C.J. No. 63, 2017 SCC 63.