The Ontario Court of Appeal has reversed a lower court decision and will allow three major securities class actions seeking almost $4-billion in damages against the Canadian Imperial Bank of Commerce (TSX:CM) to go to trial.
Lawyers for the plaintiffs say the actions against the bank, its president and CEO, Gerald McCaughey, and other senior directors and officers seek damages arising from alleged non-disclosure of CIBC's exposure to the U.S. subprime market.
It is alleged that the subsequent disclosure of this exposure in December 2007 caused massive losses to shareholders of more than $4-billion.
"I am overwhelmed by this news," Joel Rochon, senior counsel at Rochon Genova LLP, which is acting on behalf of the shareholders, said of the unanimous decision by the five-judge panel.
"This is a magnificent day for access to justice. Shareholders now have a green light to pursue CIBC for its stunning failure to disclose its $11.5-billion exposure to the U.S. subprime market. It will now be possible for everyday investors to hold public corporations accountable for misrepresentations and failures to disclose."