A federal judge has dismissed a shareholder lawsuit against Canadian Imperial Bank of Commerce (CIBC) and four executives for allegedly misleading investors about the bank's exposure to securities backed by subprime mortgages.
Dow Jones reported that in an order Wednesday, U.S. District Judge William H. Pauley III in Manhattan threw out the case, saying a number of major financial institutions failed to anticipate a meltdown in the mortgage market and the plaintiffs failed to demonstrate that CIBC and its executives received information that was contrary to their public statements.
"Looking back, a full turn of the wheel would have been appropriate. That CIBC chose an incremental measured response, while erroneous in hindsight, is as plausible an explanation for the losses as an inference of fraud," the judge said. "CIBC, like so many other institutions, could not have been expected to anticipate the crisis with the accuracy plaintiff enjoys in hindsight."
A lawyer for the lead plaintiff didn't immediately return a phone call seeking comment.