Staff of the Ontario and Quebec Securities Commissions announced today that they have reached proposed settlements with CIBC World Markets Inc.
The settlements will be considered by both regulators in a joint hearing to be held at the respective commission offices in Montreal and Toronto on Thursday February 27 at 10:00 ET.
Staff of the OSC allege CIBC World Markets failed to make adequate disclosure of its potential conflicts of interest in five analyst research reports published in late 2001 and early 2002. The five reports, dated December 17, December 18, and December 19, 2001 and January 10 and February 8, 2002, all recommended the purchase of shares of Shoppers Drug Mart Corporation.
Staff allege that the reports failed to adequately disclose that, at the time of the reports:
- CIBC World Markets had acted as the lead underwriter of Shoppers’initial public offering;
- CIBC World Markets owned 7,450,000 shares of Shoppers; and
- Shoppers was indebted to CIBC World Markets’ affiliate, the Canadian Imperial Bank of Commerce.
The terms of the settlement agreement between staff of the OSC and CIBC World Markets will remain confidential until presented to thecCommission.
Copies of the OSC’s Notice of Hearing and Statement of Allegations in this matter are available on the Commission’s website at www.osc.gov.on.ca