CIBC Slammed by SEC for $125 Million

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.