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by Mike Caswell

Canaccord Genuity Corp. denies that it did anything wrong with its handling of the portfolios of a group of retirees who lost money in a risky options trading strategy. The firm, responding to a lawsuit it faces in the Supreme Court of British Columbia, says that the retirees were fully aware of the risks. They had several years of experience with the options program and knew that there was the potential to lose large sums of money, Canaccord claims.

The denials come in response to a lawsuit that the retirees filed last month, seeking damages for losses stemming the investments. They complained that the options strategy was wholly unsuited to their mostly conservative investment objectives. The group also claimed that a stop-loss policy called "dynamite insurance" was supposed to protect them from catastrophic losses, but it failed to do so.

For its part, Canaccord says the retirees all acknowledged reading a risk acknowledgment statement that set out the risks associated with uncovered options writing. The statement informed them that the potential losses from options trading are unlimited and that Canaccord did not support the strategy.

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