Global Crossing Trustee Sues Bank for $2 Billion
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A trustee for creditors of Global Crossing Ltd., which emerged from bankruptcy protection in December 2003, sued Canadian Imperial Bank of Commerce for $2 billion in alleged insider trading profits.
The trustee accused Toronto-based CIBC of using inside information to illegally trade in the telecommunications company’s shares, according to a lawsuit filed Tuesday in U.S. Bankruptcy Court in New York.
The trustee is seeking to raise money for creditors still owed $6.2 billion from Global Crossing’s collapse.
“The profits made from these insider sales were wholly the result of self-interested dealing and breaches of fiduciary duty,” Andrew Entwistle, a lawyer representing the trustee, said in the 62-page complaint.
CIBC invested $38 million in 1996 for a 38% stake in Global Crossing, which was based in Beverly Hills at the time. The trustee accused 32 CIBC affiliates of using insider information about Global Crossing to make trades in its shares. They earned more than $2 billion, according to the complaint.
Calls to CIBC officials weren’t immediately returned.
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