Lawsuit Against Bankrupt Company Of Which Wallin Was Director Settled For $10.2-Million

A U.S. court has approved a multimillion-dollar settlement in a securities fraud class-action lawsuit against a bankrupt energy exploration company for which embattled Sen. Pamela Wallin was a director, The Globe and Mail reported. Between June 2007 and December 2011, Wallin was a paid member of the board of Oilsands Quest Inc., a Calgary-based exploration company. As a director, the Saskatchewan senator was named in the lawsuit along with fellow board members, TD Securities and Calgary consulting firm McDaniel and Associates. The lawsuit, filed by investors in United States District Court in New York in 2011, alleged that Oilsands Quest and its directors overstated the value of the company’s assets by $136-million. “Through a series of false and misleading press releases, investor presentations and accounting manipulations, defendants fraudulently pumped up Oilsands Quest’s stock price by portraying Oilsands Quest as the largest owner of valuable rights to bitumen in Saskatchewan’s oilsands, creating a modern-day gold rush for what defendants knew to be largely worthless mining rights,” reads the original court document. It goes on to say company officials knew that the vast majority of the land contained no bitumen and “defendants engaged in contrived exploration and testing activities to justify the retention of worthless mining rights in order to mislead investors about the value of the company’s properties.” The firm filed for bankruptcy protection in an Alberta court in November 2011 and for Chapter 15 protection in a U.S. bankruptcy court in February 2012. Its assets have been sold to Cenovus Energy. Read more.