CIBC faces serious claims

CIBC faces serious claims

CIBC allegedly failed to properly disclose its exposure to subprime mortgages in a move that misled the market and CIBC investors alike, according to testimony from Rotman School accounting professor Gordon Richardson.


In his 65-page review of CIBC, Richardson writes CIBC failed to comply with GAAP disclosure requirements and that information provided concerning credit risk was deceptive. 


Richardson is calling for CIBC to restate income from the last three quarters of 2007 and the first quarter of 2008 claiming original figures were overstated.


 "CIBC denies these allegations and plans to vigorously defend this action. CIBC is confident that, at all times, its conduct was appropriate and that its disclosure met applicable requirements," said CIBC spokesperson Rob Mc-Leod.


A second testimonial from a securities valuation firm in the US reports CIBC investors lost a maximum of $6.6 billion between 2007 and 2008, the period the lawsuit covers.


The case, part of a class-action suit, is expected to come before the Ontario Superior Court for certification in March 2011.

 

1 Comments
  • Mike From Marmora 2010-08-13 4:44:19 AM
    If these allegations are proven to be even partially true what does that say about a) Chartered Accountants generally, & specifically about the firm who signed off on CIBC's audit & financial statements? B)Why didn't OSFI, the Office of the Superindendent of Financial Institutions, the supposed regulator of Banks, catch the problem?...ever notice how many past Superintendents of OSFI were former senior partner CA's responsible for bank audits? How can you objectively regulate a system when your pension income or revenue for divestiture of your partnership interest comes from the payment of audit fees of the entities you regulate?
    Are our FI's really as squeeky clean as their publicity machine claim?
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