At the request of New York Attorney General Eliot Spitzer, State Supreme Court Justice James Yates dropped charges against former Canadian Imperial Bank of Commerce executive Paul Flynn on Monday.

The former managing director of equity investments at CIBC, Flynn was arrested in February 2004 on charges of first-degree grand larceny for financing late trading and market timing by hedge funds Samaritan Asset Management and Canary Capital Partners.

Spitzer's motion papers noted that back-office service provider Security Trust Co. actually initiated and facilitated the trades and that two of its former officials, Grant Seeger and William Kenyon, had pled guilty but not gone to prison. The papers also called Flynn an accomplice, not a principal and noted that CIBC had paid $125 million in settlement costs and acknowledged that it was aware of and bore responsibility for Flynn's actions.

Meanwhile, Flynn still faces pending charges from the Securities and Exchange Commission.

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