Dimitri Lascaris of Siskinds LLP was once part of a team of professional blackjack players. After being shut out of casinos, he found a better game in law.GEOFF ROBINS/The Globe and Mail
If it's a class-action lawsuit filed in Ontario on behalf of shareholders against a company or its directors, it's a good bet that Dimitri Lascaris of Siskinds LLP is the lawyer's name on the file. He knows something about good bets: For a decade, he took a break from the law to join a team of professional blackjack players that used statistical techniques to beat the odds at casinos around the world.
It all has a bit of a James Bond ring to it, but he laughs at the suggestion. "I don't bear any resemblance to any of the James Bonds," he said. "You get to dress up and smoke a nice Cuban cigar. It was lots of fun as long as they allowed you to play. It wasn't particularly enjoyable when they shut you down."
He was once a corporate securities lawyer with Sullivan & Cromwell in New York. But in 1998, he quit to join a team of former Wall Street types that travelled to the Caribbean, South America, Europe and across the United States and Canada playing blackjack and - legally, he said - using what is known as "card counting" to try to beat the house.
While the group had some success, Mr. Lascaris, 46, said he would have made more money had he stuck with law. Even with the sharpest eyes watching the blackjack table, the odds were still always stacked in favour of the house, he said. Casino bouncers would often simply remove Mr. Lascaris and his team, or detain them and accuse them of cheating.
He said the experience in the blackjack world made him think differently about the powerful Fortune 500 companies he was working for in New York. "I saw on a day-to-day basis doing what I was doing, which was perfectly legal, that the game was stacked against the public. ... That had a pretty big effect on my view of the distribution of power in our society."
That attitude informed his next career choice, made after too many casino owners got to know his face. In 2007, he joined Siskinds in London, Ont., one of the only law firms that had no problem with his gambling past. And he began going after big corporations, filing securities class actions on behalf of shareholders who believe they have been wronged by companies or directors that manipulated stock prices.
Long a staple of the class-action business in the United States, securities class actions have become a growth industry for litigation here, thanks to the passing of new rules in Ontario that took effect in 2005. According to a study by NERA Economic Consulting, 18 securities class actions were filed in Canada in 2008 and 2009. Over all, shareholders in lawsuits across Canada had outstanding demands totalling $14.7-billion.
North of the border, Mr. Lascaris's gambling instincts may be more useful. In the United States, only plaintiffs' lawyers who bring forward the most frivolous of cases end up dinged for legal costs. In Canada, if a high-stakes class action folds, the losing lawyer's firm could end up paying hundreds of thousands of dollars.
Shareholders in Canada have long had the right to go after companies that misrepresent themselves in a prospectus distributed when they are issuing new stock. But Ontario's 2005 changes enshrined in law what is known as "secondary market liability." This is the right of shareholders who bought shares already trading on the stock market to go after a company if they allege that it misrepresented itself or hid information in a way that affects the stock price.
At the time, Bay Street warned that the new rules would result in reams of U.S.-style litigation. But both plaintiff lawyers and the Bay Street heavyweights that defend the corporations they face in court agree the avalanche of claims in Canada hasn't materialized - yet.
Alan D'Silva of Stikeman Elliott LLP - who is facing Mr. Lascaris in no fewer than six securities class actions - said it is still too early to judge whether Canadian companies are going to face large numbers of these kinds of claims. (When the changes were made, his firm put out an extensive guide to the new regime called "Litigation Unleashed," which featured a menacing bolt of lightning on the cover.)
He said that whether the number of securities class actions continues to grow here will depend on some key rulings in bellwether cases now making their way through the courts. "The legislation is still very new. And we're still in the early days of establishing some of these principles," Mr. D'Silva said.
For example, under the new rules, plaintiffs seeking to file a securities class action must first request leave from a court, essentially getting a go-ahead from a judge who agrees their case has a reasonable chance of success. (This is in addition to meeting all the legal tests to be "certified" by a judge as a class action.)
The first Ontario case to make it to a leave hearing is a lawsuit against Imax Corp. in which investors - represented by the ubiquitous Mr. Lascaris - are seeking $520-million after the company had to restate its sales figures in 2005. Bay Street lawyers familiar with the decision say the bar was set rather low, in terms of how much evidence plaintiffs are required to present. The Imax leave decision is under appeal.
Dana Peebles of McCarthy Tétrault LLP, who acts for Imax in the case, wouldn't discuss it. But he said there are a number of reasons why Bay Street's warnings about a huge amount of litigation haven't proven true.
He believes plaintiffs' lawyers in Canada have been careful about which companies they target, ensuring they are going after somebody with deep pockets. And they have been cautious about launching lawsuits because it is still unclear how much work will be required to win a case.
"There continues to be uncertainly about where the goal posts are," he said. "... The less certainty about the path forward, the greater the risk."
Risk is, of course, not a foreign concept to Mr. Lascaris. His first job as part of that elite blackjack team was to play the part of what card counters call the "gorilla big player."
"Your job is just to persuade the casino that you are a very well-heeled gambling fool," he says, with the "gorilla" term meaning that he did not yet count cards himself, but read signals from other members of the team that did.
His role as the "big player" in the scheme meant his face became well known at casinos around the world, many of which share information about card counters.
"By the time I got to the end of my blackjack career, it was virtually impossible for me to wager large amounts of money at any casino in the world," Mr. Lascaris said. "I remember once I walked into a casino in Monaco. I had never been there in my entire life. And within 30 seconds, they asked me to leave the premises. It's extraordinary ... the extent to which they believe that no one on the casino floor should actually have the capacity to win."
Jeff Gray