Skadden Secures Dismissal for CIBC in Subprime CDO Case

Skadden represented Canadian Imperial Bank of Commerce (CIBC) in the dismissal of a putative class action suit brought by Plumbers & Steamfitters Local 773 Pension Fund alleging that CIBC and its officers misled investors about CIBC's exposure to CDOs backed by subprime residential mortgages.

On March 17, Judge William H. Pauley in the U.S. District Court for the Southern District of New York dismissed the complaint in its entirety with prejudice, and stated in his opinion that "knowledge of a general economic trend does not equate to harboring a mental state to deceive, manipulate or defraud." The Court further explained, in a decision that will likely have a favorable impact for other financial institutions, that "CIBC, like so many other financial institutions, could not have been expected to anticipate the crisis with the accuracy Plaintiff enjoys with hindsight."