|
Oh, Canada
Well why shouldn't you have all the same issues we U.S. companies have-after all the investment/money community is global and attached at every juncture to it's brethern
Date: 8/5/2005 8:55:45 AM ( 19 y ) ... viewed 1207 times
The Five Dumbest Things on Wall Street This Week
By Colin Barr
Companies Editor
8/5/2005 7:11 AM EDT
Click here for more stories by Colin Barr
1. Moving Forward
CIBC (BCM:NYSE - news - research) sure is moving up in the world.
For years the Canadian bank longed to play on a bigger stage. Former CEO John Hunkin pumped up the CIBC World Markets brokerage unit with a string of acquisitions in Toronto and New York. A 2001 newspaper ad trumpeted that the purchase of a retail brokerage chain had "created a home for Canadian investors that is second to none," Toronto's Globe & Mail reports.
This week, CIBC found itself second to none all right, but not in a good way. The bank agreed Tuesday to fork over $2.4 billion to settle a class-action lawsuit over its role in the Enron fraud -- vaulting it past Citigroup (C:NYSE - news - research) and J.P. Morgan Chase (JPM:NYSE - news - research) on the ever-growing Enron payout list.
On Wall Street, the news was not well received. Shares in CIBC slid 7% as investors wondered why CIBC had reserved just $247 million for a settlement. S&P cut its outlook on the bank's debt.
Of course, CIBC is no stranger to red-faced moments. Just two weeks ago, it paid $125 million to securities regulators over its role in the mutual fund trading scandal. In 2003, it paid $80 million to the Securities and Exchange Commission to settle claims that it and three executives helped Enron cook its books. The bank's many breaches of client confidentiality and other garden-variety missteps earned it recognition in the Globe & Mail this June as Canada's leading issuer -- of apologies.
Still, CEO Gerry McCaughey, who replaced Hunkin just the day before the settlement was unveiled, is looking to the future. "We are working in a number of areas to move CIBC forward," he said. "A key priority for us is to resolve this case and substantially reduce our litigation risk. By settling this case and maintaining what we believe are adequate reserves for our remaining Enron related legal issues, we can better focus our energies on our other priorities."
Like maybe being No. 1 in a less embarrassing category.
Add This Entry To Your CureZone Favorites! Print this page
Email this page
 Alert Webmaster
|
