CIBC to pay almost $500,000 in SEC settlement
WASHINGTON – CIBC World Markets Corp. agreed to pay almost $500,000 to settle allegations that it violated securities laws by performing work for California within two years after contributing in 2002 to the re-election campaign of then-governor Gray Davis.The Securities and Exchange Commission on Monday announced the settlement with the company, a unit of Canadian Imperial Bank of Commerce. CIBC was also faulted for failing to disclose contributions to the Davis campaign and five additional donations made by CIBC executives to other candidates in 2001 and 2002. The company agreed to cease and desist from future violations and settled without admitting or denying wrongdoing.Paul Rogers, 47 years old, who was CIBC’s president and a managing director of CIBC’s parent company for the U.S. region during the relevant period, and Peter Crowley, 46, currently a CIBC managing director and head of its health-care investment group, each agreed to pay a $25,000 civil penalty to settle charges that they had caused CIBC’s violations.”This resolves the issues that were the focus of our investigation, but if additional facts and circumstances come to our attention, we will pursue them as appropriate,” said George Stepaniuk, an associate regional director in the SEC’s New York office.A Municipal Securities Rulemaking Board regulation known as G-37 bars investment banks from engaging in municipal-securities business with states within two years after contributing to political leaders. The SEC found that CIBC helped underwrite 10 municipal-securities offerings, reaping $379,852 in underwriting fees during the two years after Crowley gave money to the Davis campaign.The SEC said an investment-banking client had asked Crowley for a donation to the Davis re-election campaign, and that Crowley gave $10,000 at a time when his group hoped to win more business from the client, who was hosting a Davis fundraiser. Crowley had expected to be reimbursed by CIBC, and Rogers agreed to reimburse Crowley even though he knew the payment would have regulatory implications, the SEC said.Robert Dentice, 39, also was faulted for asking Rogers to approve the payment to Crowley. Dentice, the business manager for CIBC’s investment banking division from 1999 through 2002, agreed to cease and desist from future violations.A phone call to CIBC’s lawyer was referred to CIBC’s corporation communications office, which referred a phone call to another office. Attorneys for Rogers, Crowley and Dentice weren’t immediately available.CIBC agreed to give up its underwriting fees and to pay $42,106 in interest and a $75,000 civil penalty. The SEC said that the bank had cooperated with SEC staff during the investigation.