2016 lawsuit against Serruya TORONTO — The Markham, Ont.-based Serruya family, founders of Yogen Fruz and majority-owners of Cold Stone and Pink Berry, are being sued by a relative alleging they bought and sold Yogen Fruz shares in his name in Canada and the United States without his knowledge or consent.
According to documents obtained by the Financial Post, Isaac Bensimon alleges in a statement of claim filed in September in the Ontario Superior Court of Justice that the Serruyas bought and sold 200,000 shares in Yogen Fruz Worldwide — the predecessor to their publicly traded Coolbrands Inc. — in his name from a Thornhill address in 1995.
Bensimon is the brother-in-law of Sam Serruya, the father of Yogen Fruz co-founders Michael and Aaron Serruya, making him their maternal uncle.
Bensimon is claiming $18.9 million for the amount of shares he says the Serruyas registered and sold in his name and asking for punitive damages of $15 million.
None of the allegations have been proven in court. The Serruyas and their companies deny the allegations.
“The purpose of purchase and sale of the 200,000 shares by the Serruya Defendants in the name of [Bensimon] was to manipulate the share value of [Yogen Fruz], to effect voting control of [Yogen Fruz], to secretly profit the Serruya Defendants… and to shield the Serruya Defendants from their reporting obligations and requirements to Canadian and American equity and stock regulators and Canadian and American taxing authorities,” says the statement of claim. “The activities constituted insider trading, money laundering and other illegal forms of stock manipulation.”
The statement of claim alleges that, also in 1995, the Serruyas purchased and sold an additional 500,000 shares in Bensimon’s name and credit without his knowledge, using a U.S. address. It similarly likens the activities to insider trading, money laundering and stock manipulation.
In a statement of defence filed in March, the Serruyas and their affiliated companies say that, with the exception of an investment in a frozen yogurt business in Texas in or around 1996 or 1997, they have not participated in any trading activity with or on behalf of Bensimon. The statement of defence also claims that the Serruyas have provided substantial financial support to Bensimon over the years, including cash, property and free lodging. The statement of defence says that Bensimon’s lawsuit is an abuse of process intended to extract more money from the Serruya family.
The Serruyas further claim that, in 2007, Bensimon and his brother Simon signed a release of all claims against the family and their companies in exchange for $4 million. This release, their statement of defence states, arose from a claim by Simon Bensimon that he had a 20 per cent beneficial interest in Coolbrands, and releases the Sureyas from Isaac Bensimon’s allegations. Isaac Bensimon also claims a 20 per cent beneficial interest in his suit.
In the lawsuit, Isaac Bensimon further alleges that, in 1997, the Serruyas established trading accounts in his name with Cannacord Genuity and bought and sold shares through those accounts. Bensimon claims he gave no consent to their establishment or activities, and alleges that Toronto-based Cannacord “failed to take the reasonable and proper steps necessary to verify” his authorization before processing transactions in his name.
