CIBC Hit With Record-Keeping Penalties in U.S. From CFTC, SEC

By Robb M. Stewart

Canadian Imperial Bank of Commerce has been hit with more than $40 million in penalties from U.S. authorities for record-keeping failings.

The Commodity Futures Trading Commission on Tuesday issued an order filing and settling charges with the big Canadian bank for what it said was a failure to maintain and preserve records that were required to be kept under and failing to diligently supervise matters related to its business.

The CFTC order imposes a $30 million civil monetary penalty and orders CIBC to cease and desist from further violations of record-keeping and supervision requirements. The commission said it also was ordering CIBC, which admitted the facts in the order, to engage in specific remedial undertakings.

Separately, CIBC was one of 11 firms ordered to pay more than $88 million altogether to settle U.S. Securities and Exchange Commission charges for what it said were widespread record-keeping failures.

The SEC, which said each of the firms admitted the facts set out in its orders, imposed a $12 million penalty on CIBC World Markets and CIBC Private Wealth Advisors.

The CFTC order charged CIBC with failing to stop employees, including those at senior levels, from using unapproved communication methods that include personal text messages from at least September 2018 to the present. It said CIBC was required to keep certain of the written communications since they related to the bank's CFTC-registered business, but that these communications generally weren't maintained and preserved and CIBC generally wouldn't have been able to provide them promptly to regulator if and when requested.

The SEC charged firms with violating certain record-keeping provisions of the Securities Exchange Act or the Investment Advisers Act or both, and said that all but one of the firms failed to reasonably supervise personnel with a view to preventing and detecting those violations. It said the firms it investigated admitted that during certain periods the firms' personnel sent and received unapproved "off-channel" communications that were records required to be maintained under securities laws.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

September 24, 2024 10:20 ET (14:20 GMT)

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