This is a securities class action lawsuit against Canadian Imperial Bank of Commerce (CIBC) and certain of its officers and directors.
CIBC is one of Canada's largest banking institutions, providing various financial products and services to corporate, government, and institutional clients in the U.S. and Canada.
On December 6, 2007, CIBC released fourth quarter results that stunned the banking community by revealing a surprisingly large exposure to the troubled U.S. housing market. CIBC said its write-downs had already reached $1 billion, and warned of significantly higher losses in the future related to its $9.8 billion in hedged exposure to the subprime mortgage and CDO market. Upon this announcement, shares fell 8.4% over the next two trading days, from $85.83 to $78.59.
But it was not until May 29, 2008 that CIBC's full exposure to U.S. subprime mortgages was finally revealed. On that date, CIBC swung to a fiscal second-quarter loss as it took a $2.51 billion loss related to its structured credit activities, and analysts said the potential for more write-downs looms even though the bank has taken charges totaling approximately $6 billion in the past year.
The class action complaint alleges that the statements contained in CIBC's press releases, SEC filings, conference calls and presentations during the Class Period were materially false and misleading when made because they failed to disclose that:
(i) CIBC did not make timely disclosure of material changes affecting the valuation of its investments in collateralized debt obligations consisting of U.S. subprime mortgages, in violation of U.S. Generally Accepted Accounting Principles;
(ii) CIBC's hedged subprime exposure was nearly four times larger than its unhedged subprime exposure; and
(iii) 35% of CIBC's hedged subprime exposure was entrusted with ACA Financial Guaranty Corp, a substantially undercapitalized financial guarantor.
Name (Stock Symbol)
Canadian Imperial Bank of Commerce (CIBC) (CM)
Canadian Imperial Bank of Commerce (CIBC), together with its subsidiaries, provides a range of financial products and services in Canada and internationally.
The information provided on ClassAdvocate.com is general in nature,
does not apply to any particular factual situation, and is not and
should not be taken as legal or other professional advice. We make no
commitment or warranty that the factual, legal or any other information
on ClassAdvocate.com, or on any linked website, is accurate, complete,
error-free, or current. As such, you should not rely on such information,
and should seek professional advice if and as you determine appropriate.
ClassAdvocate.com is not a lawyer referral service, and no attorney-client
or confidential relationship is or should be formed by use of the site.
The investigations listed on ClassAdvocate.com are attorney advertisements
and do not in any way constitute a referral or endorsement by ClassAdvocate.com
or any approved or authorized lawyer referral service.