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Appeal court allows class actions against CIBC seeking billions in damages

File photo of a CIBC branch in Montreal.

Ryan Remiorz/The Canadian Press

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.

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"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."

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