In yet another demonstration that the mutual fund market-timing scandal is not yet over, the Securities and Exchange Commission has settled a $125 million case with Canadian Imperial Bank of Commerce's broker/dealer and financing subsidiaries, citing a laundry list of securities violations. In this case, CIBC created structured transactions in the form of swaps in order to help hedge funds market time mutual funds and the company's CIBC World Markets unit facilitated market timing itself.

"By knowingly financing customers' late trading and market timing, as well as providing financing in amounts far greater than the law allows, [Canadian Imperial Holdings (CIHI)] and [CIBC] World Markets boosted their customers' trading profits at the expense of long term mutual fund shareholders," said Linda Chatman Thomsen, director of the division of enforcement.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.