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CIBC settles Enron fraud charges — SEC

The SEC said Monday that Canadian Imperial Bank of Commerce <CM.TO> has agreed to pay $80 million to settle charges of aiding and abetting Enron Corp. <ENRNQ.PK> in accounting fraud.
/ Source: Reuters

The U.S. Securities and Exchange Commission said Monday Canadian Imperial Bank of Commerce agreed to pay $80 million to settle charges it helped fallen energy trader Enron Corp. in accounting fraud.

The SEC also said it had sued three current and former CIBC executives -- two of whom were settling and will pay a total of more than $600,000 -- in connection with the Enron case.

Enron, once the seventh-largest company in the United States, collapsed and filed for bankruptcy in 2001 in the first of a series of corporate scandals to shake U.S. markets.

The SEC said it charged CIBC and the three executives with ”having helped Enron to mislead its investors through a series of complex structured finance transactions over a period of several years preceding Enron’s bankruptcy.”

The $80 million payment will consist of $37.5 million in repayment of ill-gotten gains, a $37.5 million penalty and $5 million in prejudgment interest, the SEC said.

In a separate action, Canada’s bank regulator and the U.S. Federal Reserve said they jointly settled with CIBC over Enron-related transactions.

The Fed and Canada’s Office of the Superintendent of Financial Institutions said CIBC must adopt remedial policies and procedures, some of which are already in place.