CIBC, former trader Flynn settle market-timing feud
TORONTO (Reuters) - Canadian Imperial Bank of Commerce said on Friday that it resolved legal matters with a former New York-based trader who was accused in 2004 of helping hedge funds in the mutual fund market timing scandal.
In a brief statement, CIBC said it reached an "amicable resolution" with former employee Paul Flynn and was "sympathetic" to the difficulties he had faced over the last five years.
Flynn had sued the bank for allegedly misrepresenting his role in the market-timing matter.
In its statement, the bank noted that all charges against Flynn were dropped and the two parties have entered into an unspecified consulting arrangement.
Flynn, a few CIBC World Markets colleagues, the bank and certain clients were investigated as part of former New York Attorney-General Eliot Spitzer's 2003-2004 probe into market timing and late trading of mutual funds.
Flynn, who was CIBC World Markets' managing director of equity investments in New York, was arrested in February 2004, for allegedly helping to finance hedge fund clients who took part in illegal and deceptive mutual fund trades.
Criminal charges brought by Spitzer against Flynn were dropped in November 2005, and civil charges filed by the SEC were dropped in August 2006.
For its part, CIBC paid $125 million in restitution and penalties to settle the case.
(Reporting by Lynne Olver; editing by Rob Wilson)
© Thomson Reuters 2017 All rights reserved.