CIBC has reached an agreement in principle to settle a shareholder lawsuit that is related to a US$2 billion suit filed by creditors in U.S. bankruptcy court by the trustee for telecom firm Global Crossing Ltd.

The bank said today it reached that provisional deal during the second quarter to settle the shareholder class-action lawsuit for “an immaterial amount.”

CIBC and several of its affiliates were hit yesterday with a lawsuit that accused them of participating in a scheme to profit from the sale of shares in Global Crossing.

In a statement released today, the bank denied the allegations in the lawsuit.

“The action filed in New York yesterday afternoon by the Estate Representative of Global Crossing Ltd. in the U.S. Bankruptcy Court is essentially identical to claims filed against CIBC in 2004 and seeks to add additional CIBC affiliates and other third-party defendants. The action contains no new claims against CIBC,” the bank said.

CIBC moved to dismiss these claims in January and that motion is pending, and said it “continues to believe it has strong legal and factual defences against these claims.”

Yesterday’s lawsuit was filed by a trustee representing Global Crossing creditors. It claims that CIBC and several related companies engaged in insider trading of the fibre-optics company’s shares. The suit contends CIBC and others made roughly US$2 billion in profit from this trading, even though they allegedly knew Global Crossing was in poor financial health. Many of these related companies were controlled by former CIBC executives.