The plaintiffs sued CIBC and Belzberg for breach of contract or negligence after a direct market access (DMA) system malfunctioned, causing significant error trades and the eventual shutdown of their hedge fund.
The court found CIBC prima facie liable, determining that Belzberg employees acted as CIBC's apparent agents when they negligently caused the malfunction.
The court rejected CIBC's broad contractual exclusion of liability for direct damages but upheld the exclusion for lost profits.
The plaintiffs were awarded direct trading losses, with no reduction for mitigation or contributory negligence, and punitive damages were denied.
