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In re CANADIAN IMPERIAL

Exhibit of Settled Administrative Proceeding Against Canadian Imperial Bank of Commerce Subsidiaries
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summary

Canadian Imperial Holdings Inc. and CIBC World Markets Corp. willfully violated federal antifraud securities laws and margin credit regulations, leading to a $125 million settlement and a cease-and-desist order, after which the SEC granted CIBC a waiver to restore its access to safe harbor protections for forward-looking statements.

paragraph

The SEC found that Canadian Imperial Holdings Inc. (CIHI) and CIBC World Markets Corp. willfully violated Sections 17(a) of the Securities Act, Sections 10(b) and 7(d) of the Exchange Act, Rule 10b-5, Rule 22c-1, and Regulations T and U through improper margin lending and fraudulent mutual fund trading practices. As part of a settlement, the two subsidiaries agreed to pay $100 million in disgorgement and $25 million in civil penalties, totaling $125 million, and to cease and desist from future violations, while retaining an Independent Distribution Consultant to oversee fund distribution. The violations triggered automatic disqualification from using safe harbor protections for forward-looking statements, but the SEC granted CIBC a waiver based on the remedial nature of the settlement and its cooperation.

narrative

Canadian Imperial Holdings Inc. (CIHI) and CIBC World Markets Corp., subsidiaries of Canadian Imperial Bank of Commerce (CIBC), were found by the SEC to have willfully violated federal securities antifraud provisions, including Section 17(a) of the Securities Act and Sections 10(b), 7(d), 7(c), 11(d), 15(c), and 17(a) of the Exchange Act, along with Rules 10b-5, 10b-3, 17a-3, and 22c-1, as well as Federal Reserve Regulations T and U governing margin credit. The misconduct involved improper margin lending practices and fraudulent activities related to mutual fund trading, including failure to comply with pricing and redemption rules under Rule 22c-1. In a settlement agreement dated July 20, 2005, the SEC ordered the respondents to pay $125 million in total—$100 million in disgorgement and $25 million in civil penalties—and to cease and desist from future violations. The respondents were also required to retain an Independent Distribution Consultant to develop a plan for distributing the $125 million in funds. The administrative order triggered an automatic statutory disqualification under Sections 27A(b)(1)(A)(ii) and 21E(b)(1)(A)(ii), which would have barred CIBC and its affiliates from using safe harbor protections for forward-looking statements. However, based on CIBC’s request and representations regarding remedial actions and cooperation, the SEC granted a waiver of this disqualification, finding it appropriate under the circumstances to allow CIBC to resume using safe harbor protections despite the prior violations.

Enriched metadata

Scheme
unregistered-securities (100%)
Disgorgement
$100,000,000
Civil penalty
$25,000,000
Classified unregistered-securities(confidence 100%). EDGAR detection: forms Form D/S-1· recall 41% / precision 30%. detection rule →
Statutes
SECTION 27A(b) OF THE SECURITIES ACTSECTION 21E(b) OF THE SECURITIES EXCHANGE ACTSECTION 27A(b)(1)(A)(ii) OF THE SECURITIES ACTSECTION 21E(b)(1)(A)(ii) OF THE SECURITIES EXCHANGE ACTSection 8A of the Securities ActSections 15(b) and Section 21C of the Securities Exchange ActSections 15(b) and Section 21C of the Securities Exchange ActSection 203(e) of the Investment Advisers ActSections 9(b) and 9(f) of the Investment Company ActSections 9(b) and 9(f) of the Investment Company ActSection 17(a) of the Securities ActSections 7(d) and 10(b) of the Securities Exchange ActSections 7(d) and 10(b) of the Securities Exchange ActSection 22(c) of the Investment Company ActSection 27A(c) of the Securities ActRule 10b-5Rule 22c-1
Parties
canadian imperial holdings inc.cibc world markets corp.Securities and Exchange Commission
Keywords
securitiessecurities exchangeexchangeprovisions securitiesordercanadian imperialworld marketssecurities securitiessecurities sectionsinvestment companycommissionregulation promulgatedpromulgated federalfederal reservereserve board

Extracted insights

Dollar amounts 4
  • $125.00M $125,000,000 $100M–$1B
  • $125.00M $125,000,000 $100M–$1B
  • $100.00M $100,000,000 $100M–$1B
  • $25.00M $25,000,000 $10M–$100M
Entities 3
  • company canadian imperial holdings inc.
  • company cibc world markets corp.
  • agency Securities and Exchange Commission
Triples 7
  • Canadian Imperial Holdings Inc. willfully violated Section 17(a) of the Securities Act of 1933, Sections 7(d) and 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5
  • Canadian Imperial Holdings Inc. willfully aided and abetted violations of Rule 22c-1 under Section 22(c) of the Investment Company Act of 1940
  • CIBC World Markets Corp. willfully violated Section 17(a) of the Securities Act, Sections 7(c), 10(b), 11(d), 15(c) and 17(a) of the Exchange Act and Rules 10b-3, 10b-5, and 17a-3
  • Canadian Imperial Bank of Commerce submitted waiver request disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act of 1933 and Section 21E(b)(1)(A)(ii) of the Securities Exchange Act of 1934
  • SEC issued Order Order Instituting Administrative and Cease-and-Desist Proceedings against Canadian Imperial Holdings Inc. and CIBC World Markets Corp. on July 20, 2005
  • Canadian Imperial Holdings Inc. shall cease and desist from violations of Section 17(a) of the Securities Act, Sections 7(d) and 10(b) of the Exchange Act, and Rule 10b-5
  • CIBC World Markets Corp. shall cease and desist from violations of Section 17(a) of the Securities Act, Sections 7(c), 10(b), 11(d), 15(c) and 17(a) of the Exchange Act, and Rules 10b-3, 10b-5, and 17a-3
PDF
In re CANADIAN IMPERIAL · Source
Text layers
Extracted body text (6,153c) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
                                                 UNITED                                                 STATES OF AMERICA 

                                                                     Before                                                                     the                                                                     

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES ACT OF 1933 
Release No. 8593 July 20, 2005 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 52064 / July 20, 2005 
ADMINISTRATIVE PROCEEDING 
File No. 3-11987 
In the Matter of 
CANADIAN IMPERIAL 
HOLDINGS INC. and CIBC 
WORLD MARKETS CORP., 
Respondents. 
ORDER UNDER SECTION 27A(b) OF THE 
SECURITIES ACT OF 1933 AND SECTION 
21E(b) OF THE SECURITIES EXCHANGE 
ACT OF 1934, GRANTING WAIVERS OF 
THE DISQUALIFICATION PROVISIONS OF 
SECTION 27A(b)(1)(A)(ii) OF THE 
SECURITIES ACT OF 1933 AND SECTION 
21E(b)(1)(A)(ii) OF THE SECURITIES 
EXCHANGE ACT OF 1934 
Canadian Imperial Bank of Commerce (“CIBC”), a foreign private issuer that files 
registration statements and reports with the Commission, has submitted a letter on behalf of itself 
and its affiliates, dated July 15, 2005, requesting a waiver of the disqualification provisions of 
Section 27A(b)(1)(A)(ii) of the Securities Act of 1933 (“Securities Act”) and Section 
21E(b)(1)(A)(ii) of the Securities Exchange Act of 1934 (“Exchange Act”) arising from the 
settlement of Canadian Imperial Holdings Inc. (“CIHI”) and CIBC World Markets Corp. 
(“World Markets”) (collectively “Respondents”), two subsidiaries of CIBC, to an administrative 
proceeding commenced by the Commission.  
On, July 20, 2005, pursuant to Respondents’ Offer of Settlement, the Commission issued 
an Order Instituting Administrative and Cease-and-Desist Proceedings Making Findings, and 
Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 8A of the 
Securities Act of 1933, Sections 15(b) and Section 21C of the Securities Exchange Act of 1934, 
Section 203(e) of the Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the 
Investment Company Act of 1940 (“Order”) against Respondents.  Under the Order, the 
Commission found that:  
(1) CIHI willfully violated Section 17(a) of the Securities Act of 1933 (“Securities 
Act”), Sections 7(d) and 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) 

 
 
 
 
 
 
and Rule 10b-5 thereunder, Regulation U promulgated by the Federal Reserve Board 
regarding the extension of margin credit, and willfully aided and abetted and caused 
violations of Rule 22c-1, as adopted under Section 22(c) of the Investment Company Act of 
1940; and 
(2) World Markets willfully violated Section 17(a) of the Securities Act, Sections 
7(c), 10(b), 11(d), 15(c) and 17(a) of the Exchange Act and Rules 10b-3, 10b-5, and 17a-3 
thereunder, Rule 22c-1, as adopted under Section 22(c) of the Investment Company Act of 
1940, and Regulation T promulgated by the Federal Reserve Board regarding the extension 
of margin credit. 
 The Order requires, among other things:  
(1) CIHI shall cease and desist from committing or causing any violations and any future 
violations of Section 17(a) of the Securities Act, Sections 7(d) and 10(b) of the Exchange 
Act and Rule 10b-5 thereunder, Rule 22c-1, as adopted under Section 22(c) of the 
Investment Company Act of 1940, and Regulation U promulgated by the Federal Reserve 
Board regarding the extension of margin credit; 
(2) World Markets shall cease and desist from committing or causing any violations and 
any future violations of Section 17(a) of the Securities Act, Sections 7(c), 10(b), 11(d), 
15(c) and 17(a) of the Exchange Act and Rules 10b-3, 10b-5, and 17a-3 thereunder, Rule 
22c-1, as adopted under Section 22(c) of the Investment Company Act of 1940, and 
Regulation T promulgated by the Federal Reserve Board regarding the extension of 
margin credit; 
(3) Respondents to pay, on a joint and several basis, disgorgement in the total amount of 
$100,000,000 (“disgorgement”) and civil money penalties in the amount of $25,000,000 
(“penalties”), for a total payment of $125,000,000; and 
(4) Respondents to retain an Independent Distribution Consultant to develop a plan of 
distribution for the $125,000,000 in disgorgement and penalties;  
The safe harbor provisions of Section 27A(c) of the Securities Act and Section 21E(c) of 
the Exchange Act are not available for any forward looking statement that is “made with respect 
to the business or operations of an issuer, if the issuer . . . during the 3-year period preceding the 
date on which the statement was first made . . . has been made the subject of an . . . 
administrative decree or order arising out of a governmental action that (I) prohibits future 
violations of the antifraud provisions of the federal securities laws; (II) requires that the issuer 
cease and desist from violating the antifraud provisions of the securities laws; or (III) determines 
that the issuer violated the antifraud provisions of the securities laws[.]” Section 27A(b)(1)(A)(ii) 
of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act. The disqualifications 
may be waived “to the extent otherwise specifically provided by rule, regulation, or order of the 
Commission.” Section 27A(b) of the Securities Act and Section 21E(b) of the Exchange Act. 
Based on the representations set forth in CIBC’s request, the Commission has determined 
that, under the circumstances, the request for a waiver of the disqualifications resulting from the 
entry of the Order is appropriate and should be granted.  
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Accordingly, IT IS ORDERED, pursuant to Section 27A(b) of the Securities Act and 
Section 27E(b) of the Exchange Act, that a waiver from the disqualification provisions of 
Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act 
as to CIBC and its affiliates resulting from the entry of the Order is hereby granted. 
            By            the            Commission.            
       Jonathan G. Katz
       Secretary 
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OCR text (5,797c · tika · 95% conf) 
UNITED STATES OF AMERICA 

 Before the 


SECURITIES AND EXCHANGE COMMISSION 


SECURITIES ACT OF 1933 
Release No. 8593 July 20, 2005 

SECURITIES EXCHANGE ACT OF 1934 
Release No. 52064 / July 20, 2005 

ADMINISTRATIVE PROCEEDING 
File No. 3-11987 

In the Matter of 

CANADIAN IMPERIAL 
HOLDINGS INC. and CIBC 
WORLD MARKETS CORP., 

Respondents. 

ORDER UNDER SECTION 27A(b) OF THE 
SECURITIES ACT OF 1933 AND SECTION 
21E(b) OF THE SECURITIES EXCHANGE 
ACT OF 1934, GRANTING WAIVERS OF 
THE DISQUALIFICATION PROVISIONS OF 
SECTION 27A(b)(1)(A)(ii) OF THE 
SECURITIES ACT OF 1933 AND SECTION 
21E(b)(1)(A)(ii) OF THE SECURITIES 
EXCHANGE ACT OF 1934 

Canadian Imperial Bank of Commerce (“CIBC”), a foreign private issuer that files 
registration statements and reports with the Commission, has submitted a letter on behalf of itself 
and its affiliates, dated July 15, 2005, requesting a waiver of the disqualification provisions of 
Section 27A(b)(1)(A)(ii) of the Securities Act of 1933 (“Securities Act”) and Section 
21E(b)(1)(A)(ii) of the Securities Exchange Act of 1934 (“Exchange Act”) arising from the 
settlement of Canadian Imperial Holdings Inc. (“CIHI”) and CIBC World Markets Corp. 
(“World Markets”) (collectively “Respondents”), two subsidiaries of CIBC, to an administrative 
proceeding commenced by the Commission.  

On, July 20, 2005, pursuant to Respondents’ Offer of Settlement, the Commission issued 
an Order Instituting Administrative and Cease-and-Desist Proceedings Making Findings, and 
Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 8A of the 
Securities Act of 1933, Sections 15(b) and Section 21C of the Securities Exchange Act of 1934, 
Section 203(e) of the Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the 
Investment Company Act of 1940 (“Order”) against Respondents.  Under the Order, the 
Commission found that:  

(1) CIHI willfully violated Section 17(a) of the Securities Act of 1933 (“Securities 
Act”), Sections 7(d) and 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) 



 

 

 
 

 

 

and Rule 10b-5 thereunder, Regulation U promulgated by the Federal Reserve Board 
regarding the extension of margin credit, and willfully aided and abetted and caused 
violations of Rule 22c-1, as adopted under Section 22(c) of the Investment Company Act of 
1940; and 

(2) World Markets willfully violated Section 17(a) of the Securities Act, Sections 
7(c), 10(b), 11(d), 15(c) and 17(a) of the Exchange Act and Rules 10b-3, 10b-5, and 17a-3 
thereunder, Rule 22c-1, as adopted under Section 22(c) of the Investment Company Act of 
1940, and Regulation T promulgated by the Federal Reserve Board regarding the extension 
of margin credit. 

 The Order requires, among other things:  

(1) CIHI shall cease and desist from committing or causing any violations and any future 
violations of Section 17(a) of the Securities Act, Sections 7(d) and 10(b) of the Exchange 
Act and Rule 10b-5 thereunder, Rule 22c-1, as adopted under Section 22(c) of the 
Investment Company Act of 1940, and Regulation U promulgated by the Federal Reserve 
Board regarding the extension of margin credit; 

(2) World Markets shall cease and desist from committing or causing any violations and 
any future violations of Section 17(a) of the Securities Act, Sections 7(c), 10(b), 11(d), 
15(c) and 17(a) of the Exchange Act and Rules 10b-3, 10b-5, and 17a-3 thereunder, Rule 
22c-1, as adopted under Section 22(c) of the Investment Company Act of 1940, and 
Regulation T promulgated by the Federal Reserve Board regarding the extension of 
margin credit; 

(3) Respondents to pay, on a joint and several basis, disgorgement in the total amount of 
$100,000,000 (“disgorgement”) and civil money penalties in the amount of $25,000,000 
(“penalties”), for a total payment of $125,000,000; and 

(4) Respondents to retain an Independent Distribution Consultant to develop a plan of 
distribution for the $125,000,000 in disgorgement and penalties;  

The safe harbor provisions of Section 27A(c) of the Securities Act and Section 21E(c) of 
the Exchange Act are not available for any forward looking statement that is “made with respect 
to the business or operations of an issuer, if the issuer . . . during the 3-year period preceding the 
date on which the statement was first made . . . has been made the subject of an . . . 
administrative decree or order arising out of a governmental action that (I) prohibits future 
violations of the antifraud provisions of the federal securities laws; (II) requires that the issuer 
cease and desist from violating the antifraud provisions of the securities laws; or (III) determines 
that the issuer violated the antifraud provisions of the securities laws[.]” Section 27A(b)(1)(A)(ii) 
of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act. The disqualifications 
may be waived “to the extent otherwise specifically provided by rule, regulation, or order of the 
Commission.” Section 27A(b) of the Securities Act and Section 21E(b) of the Exchange Act. 

Based on the representations set forth in CIBC’s request, the Commission has determined 
that, under the circumstances, the request for a waiver of the disqualifications resulting from the 
entry of the Order is appropriate and should be granted.  

2
 



 

  

 
 
 

   
 

Accordingly, IT IS ORDERED, pursuant to Section 27A(b) of the Securities Act and 
Section 27E(b) of the Exchange Act, that a waiver from the disqualification provisions of 
Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act 
as to CIBC and its affiliates resulting from the entry of the Order is hereby granted. 

 By the Commission. 

       Jonathan  G.  Katz
       Secretary  

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