CIBC to pay $73 million to overcharged clients

By Staff | October 28, 2016 | Last updated on October 28, 2016
1 min read

CIBC will pay $73.3 million to current and former clients who were overcharged investment fees for up to 14 years.

CIBC World Markets, CIBC Investor Services and CIBC Securities reached a no-contest settlement with the OSC on Friday.

Read: CIBC overcharged investment clients for 14 years

The compensation covers overcharged fees and opportunity cost, the OSC says.

CIBC discovered some of its fee-based investment account clients were being charged twice if their accounts also held funds with embedded fees. It self-reported the problem to the OSC in March 2015.

OSC staff allege there were inadequacies in the CIBC’s systems of controls and supervision. OSC staff don’t allege, and have found no evidence of, dishonest conduct by CIBC. CIBC neither admitted nor denied the accuracy of the facts and conclusions of OSC Staff.

CIBC is also paying $3 million to advance the OSC’s mandate of protecting investors, and a further $50,000 toward the costs of the investigation.

Read: OSC approves record no-contest settlement with CI Investments

The OSC says that after reporting the problem, CIBC provided prompt, detailed and candid co-operation to with investigators. CIBC has also implemented additional controls and supervision meant to prevent the mistake from happening again.

Earlier this year, CI Investments compensated clients after discovering it had understated a fund’s NAV and underpaid clients. Its $156.1-million repayment was the largest-ever no-contest settlement the OSC has seen.

To date, the OSC has approved six no-contest settlements, resulting in approximately $270 million in compensation to investors.

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The staff of have been covering news for financial advisors since 1998.