Reuters reports here that Canadian Imperial Bank of Commerce (CIBC)
is the first Canadian bank to face legal action over investments tied to plunging U.S. subprime mortgages, after a Toronto law firm revealed a proposed class action on Wednesday, claiming the bank and some executives failed to fully disclosure its exposure.
The lawsuit, filed in an Ontario court, alleges that the bank, President and Chief Executive Gerald McCaughey and other officers and directors, did not disclose the extent of CIBC’s total exposure, through various structured-credit securities, to the sliding U.S. subprime mortgage market.
Their alleged misrepresentations artificially boosted the bank’s share price, according to the 79-page claim, which was filed on Tuesday.
