CIBC, former trader Flynn settle market-timing feud
November 29th, 2008 | by admin |TORONTO (Reuters) - Canadian Imperial Bank of Commerce(CM.TO: Quote, Profile, Research, Stock Buzz) said on Friday that it resolved legal matters with aformer New York-based trader who was accused in 2004 of helpinghedge funds in the mutual fund market timing scandal.
In a brief statement, CIBC said it reached an “amicableresolution” with former employee Paul Flynn and was”sympathetic” to the difficulties he had faced over the lastfive years.
Flynn had sued the bank for allegedly misrepresenting hisrole in the market-timing matter.
In its statement, the bank noted that all charges againstFlynn were dropped and the two parties have entered into anunspecified consulting arrangement.
Flynn, a few CIBC World Markets colleagues, the bank andcertain clients were investigated as part of former New YorkAttorney-General Eliot Spitzer’s 2003-2004 probe into markettiming and late trading of mutual funds.
Flynn, who was CIBC World Markets’ managing director ofequity investments in New York, was arrested in February 2004,for allegedly helping to finance hedge fund clients who tookpart in illegal and deceptive mutual fund trades.
Criminal charges brought by Spitzer against Flynn weredropped in November 2005, and civil charges filed by the SECwere dropped in August 2006.
For its part, CIBC paid $125 million in restitution andpenalties to settle the case.
(Reporting by Lynne Olver; editing by Rob Wilson)
