CIBC paying $73M to compensate clients overcharged on investment fees - Action News
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CIBC paying $73M to compensate clients overcharged on investment fees

CIBC investment dealers will pay more than $73 million to compensate clients who were inadvertantly overcharged fees, Ontario's securities regulator says.

CIBC says it has taken 'corrective action' and is starting to contact affected people

CIBC says it will begin contacting current and former clients who were inadvertently overcharged on investment fees, following a no-contest settlement with the Ontario Securities Commission. (Nathan Denette/Canadian Press)

CIBCinvestment dealers will pay more than $73million to compensate clients who were inadvertentlyovercharged fees, Ontario's securities regulator says.

Under the terms of a no-contest settlement approved Friday, the Ontario Securities Commission saidit has found no evidence of dishonest conduct byCIBCWorld Markets Inc.,CIBCInvestor Services Inc. and CIBCSecurities Inc.

According to a statement of allegations released earlier this week by the OSC,CIBC'sinvestment dealers mistakenly charged some of their customers excess fees for mutual funds,ETFsand other investment products dating back to 2002.

According to the document, the bank self-reported the activities to the regulator after uncovering "inadequacies" in the way it was charging some of its customers for investment products.

According to the settlement, the CIBCdealersneither admitted nor denied the accuracyof the facts and conclusions of the OSC.

For its part, CIBCis starting to contact people who were overcharged.

"We will begin reaching out to affected current and former clients to compensate them," CIBC spokesperson Caroline Van Hasselt said in an emailstatement.

"We regret the inconvenience this has caused our clients and have taken corrective action byimplementing additional controls to prevent it from occurring again."

The provincial regulator said the dealers wereco-operative, and have brought inadditionalcontrols and supervision to prevent a recurrence of the matter.

"Strong compliance systems are critical to investor protection and market confidence,"JeffKehoe, director of enforcement at the OSC, said in statement. "We expect registrants to have effective controls in place to deal fairly with clients with regard to fees, and to correct non-compliant conduct in a timely manner."

The CIBC dealers have also paid $3 million to go toward theOSC'smandate of protecting investors, plus $50,000 for investigation costs.

In July, the OSC reached a settlement with some of Scotiabank's investment arms along similar lines. In that case, thebank agreed to reimburse customers$19,997,821 worth of feesthey shouldn't have been charged.

In February,CI Investments Inc. agreed to pay $156.1 millionto reimburse some of its clients for understating the value of its mutual funds while clients were buying and selling them.