CIBC to pay $125 million to settle class-action lawsuit in wake of financial crisis

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Published December 7, 2021 at 10:30 am

TORONTO — CIBC has agreed to pay $125 million to settle a class-action lawsuit that had accused the bank of misrepresenting its exposure to U.S. residential mortgage-backed securities ahead of the financial crisis.

The big Canadian bank has denied the allegations and did not make any admission of liability or wrongdoing in the settlement agreement. CIBC said it reached the deal to avoid further legal costs and put the matter behind it.

Under the settlement, investors who bought shares of CIBC between May 31, 2007, and Feb. 28, 2008, may be entitled to a payment.

The meltdown of the U.S. residential mortgage-backed securities market was a key factor in the financial crisis.

The agreement must still be approved by the Ontario Superior Court of Justice.

A hearing has been set for Jan. 12.

This report by The Canadian Press was first published Dec. 7, 2021.

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The Canadian Press

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