CIBC Settles Probe of Political Giving

Canadian Imperial Bank of Commerce agreed to pay $496,958 to settle U.S. allegations it broke the law by underwriting municipal securities for the state of California after paying for campaign donations to former Gov. Gray Davis and five other politicians, regulators said Monday.

CIBC World Markets Corp., the investment-banking division of Canada’s fifth-largest bank by assets, didn’t report the $12,500 in contributions in 2001 or 2002 or have accurate records of the money, the Securities and Exchange Commission said in an administrative proceeding. Securities laws prevent a corporate campaign donor from performing municipal securities work for an issuer within two years of a contribution to an official.

During the two-year prohibition, CIBC was co-writer for 10 underwritings of more than $26.6 billion in municipal securities for the state of California, the agency said.

“No one at CIBC took any steps to prevent CIBC from engaging in municipal securities business with the state of California,” the SEC said. “CIBC received a total of $379,852 in fees from the state of California and its agencies for underwriting these securities.”

Peter J. Crowley, 46, of Rye, N.Y., managing director of CIBC, was solicited by an investment-banking client for a $10,000 contribution to Davis’ reelection campaign in 2002, the SEC said. CIBC’s attorney said the company couldn’t make a political contribution, although Crowley could make a personal pledge, the agency said.

Crowley wrote a personal check and was reimbursed by CIBC for a “marketing expense,” the SEC said.

Crowley and Paul D. Rogers, 47, of Eastchester, N.Y., former CIBC president, were fined $25,000 each. Robert J. Dentice, 39, of New York, former business manager, agreed to stop violating securities laws. None admitted or denied wrongdoing.

“Peter Crowley’s not accused of intentionally violating the rules in any way and remains a valued employee,” said attorney Paul Fishman of New York-based Friedman, Kaplan, Seiler & Adelman.

CIBC, based in Toronto, lists its shares on the New York Stock Exchange and must abide by SEC rules.

The bank didn’t admit or deny wrongdoing.