CIBC Settles Market-Timing Lawsuit With Accused Ex-Employee

Dec 1 2008 | 2:04am ET

Paul Flynn, who battled charges that he helped hedge funds illegally trade mutual fund shares and won, has made peace with his former employers.

The Canadian Imperial Bank of Commerce said Friday it had settled a lawsuit brought by Flynn, accusing it of misrepresenting his role in the alleged market-timing and late-trading scheme. Flynn served as managing director of equity investments for CIBC in New York at the time of his arrest in 2004.

As part of the deal, Flynn has “entered into a consulting arrangement” with his former employer.

In a statement, CIBC said it had reached an “amicable resolution” with Flynn, and said it was “sympathetic” to the trouble he has suffered since he was caught up in former New York Attorney General Eliot Spitzer’s investigation into illicit mutual fund trading in 2003 and 2004. The criminal charges against him were dropped last November, with Securities and Exchange Commission civil charges being thrown out in August.

CIBC paid US$125 million to settle the illegal trading charges.

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