Oct. 29 (Bloomberg) -- CP Ships, the Canadian unit of TUI AG, agreed to pay C$12.8 million ($12 million) to settle a Canadian securities suit that claimed the company overstated its financial results in 2002 and 2003, a law firm said.

Siskinds LLP, a London, Ontario-based law firm, said the settlement is better than the settlement in a parallel class action suit filed in the U.S., where shareholders received $1.3 million after a Florida federal judge dismissed the claim.

“For a long time, it was widely believed that the U.S. legal regime did a better job than Canada’s legal regime of protecting investor rights,” Dimitri Lascaris, a partner at Siskinds, said in a statement. “This settlement demonstrates that significant strides have been made in this country.”

CP Ships said in a 2003 news release that it had earnings of $52 million in 2002. The release was misleading because the company’s net income was “materially lower,” and in 2004 CP Ships said it had overstated the net income in 2002 as well as in the following year and the first quarter of 2004, according to the statement of claim.

Following the disclosure, CP Ships shares fell 22 percent in Toronto and New York, according to the complaint.

TUI, based in Hannover, Germany, bought CP Ships in 2005 for $2.26 billion.

The settlement with Canadians who bought CP Ships securities between Jan. 29, 2003, and Aug. 9, 2004, must be approved by judges in Ontario and Quebec.

The case is Between Peter McCann and CP Ships Ltd. File No. 46098 CP. Ontario Superior Court of Justice (London).

To contact the reporter on this story: Joe Schneider in Toronto at jschneider5@bloomberg.net

Last Updated: October 29, 2009 11:35 EDT