Jim Middlemiss, Financial Post
Published: Wednesday, July 23, 2008
The subprime litigation frenzy in the United States has spilled over the border with the launching of a multi-billion-dollar class-action against CIBC and eight current and former executives over failed investments in U.S. residential mortgages.
Shareholder and proposed lead plaintiff Howard Green, of Thornhill, Ont., alleges that the defendants misrepresented the bank’s exposure to subprime investments, engaged in material misrepresentations and failed to make timely disclosures, contrary to securities regulation.
The allegations have yet be proved in a court of law.
CIBC spokesman Rob McLeod said in a statement that “CIBC denies these allegations and plans to vigorously defend this action.”
Mr. Green has retained the Toronto law firm Rochon Genova, co-counsel in a shareholder suit against Nortel that settled for US$2.5-billion.
“My sense is that CIBC went very, very deep into this market,” said lawyer Joel Rochon. “The essence of our claim is that they failed to disclose the magnitude and troubling risk profile of these investments.”
