Canada’s No. 3 Bank Settles in Enron Case

Canadian Imperial Bank of Commerce, Canada’s third-largest bank, agreed to pay $80 million to settle Securities and Exchange Commission allegations that it contributed to the collapse of Enron Corp. by helping the energy trader inflate profit and hide debts.

In addition, Daniel Ferguson, 52, a former bank executive vice president, will pay $563,000 and be barred from serving as an officer or director of a public company for five years. Former executive Mark Wolf, 41, is paying $60,000 to settle the charges. Another former executive, Ian Schottlaender, 46, is fighting the SEC’s claims.

Toronto-based Canadian Imperial was “an aider and abetter of the Enron fraud,” said Linda Thomsen, a deputy enforcement director for the SEC.

Canadian Imperial follows Citigroup Inc., Merrill Lynch & Co. and J.P. Morgan Chase & Co., which agreed to pay a combined $388 million to settle state and federal charges in the Enron case. Enron’s court-appointed examiner Neal Batson said in July that Canadian Imperial and five other banks had known of “wrongful conduct” related to Enron transactions. Deutsche Bank and Barclays also were identified by Batson.

The SEC accused Canadian Imperial of helping to arrange 34 structured transactions that were set up to look like asset sales to enable Enron to “hide from investors and rating agencies the true extent of its borrowings.” Canadian Imperial neither admitted nor denied wrongdoing, the SEC said.

Of the $80-million payment, $37.5 million will be used to pay back proceeds from the transaction; $37.5 million is penalties and $5 million is interest, the SEC said.

Canadian Imperial set aside $81.9 million this fiscal year to cover the possible costs of regulatory probes of its dealings with Houston-based Enron. It won’t set aside any more, said Tom Woods, the bank’s chief financial officer.

Shares of Canadian Imperial rose 77 cents to $48.26 in New York Stock Exchange trading Monday.