Plumbers & Steamfitters Local 733 Pension Fund v. Canadian Imperial Bank of Commerce, 694 F. Supp. 2d 287 (S.D.N.Y. 2010) (Mallor, 16th Ed., p. 1230, No. 15). Plumbers & Steamfitters Local 773 Pension Fund (the Pension Fund) sued Canadian Imperial Bank of Commerce (CIBC) and four of its officers on the grounds that they misled investors about CIBC's exposure to fixed-income securities backed by subprime residential mortgages. One example of a misstatement was in the 2006 Accountability Report, in which CIBC stated, Although actual losses are not expected to be material, as of October 31, 2006, our maximum exposure to loss as a result of involvement with the CDOs [collateralized debt obligations] was approximately $729 million. Pension Fund alleges that this reference constituted false and misleading representations because CIBC's actual exposure to the U.S. real estate market was almost $12 billion. Pension Fund argued that CIBC and its officers were liable under Securities Exchange Act Rule 10b-5 because they failed to comply with generally accepted accounting principles in accounting for the CDO losses.

Answer True or False(explain answers)

1. If the CIBC made the statements actual losses are not expected to be material and our actual exposure to loss as a result of involvement with the CDOs was approximately $729 million, in either a proxy solicitation or its Annual 10-K report, CIBC can found liable under Section 18 of the 1934 Act.

2. The executive officers of Canadian Imperial Bank violate Section 16(b) of the 1934 Securities Exchange Act, if they failed to properly disclose the Canadian Imperial Banks financial exposure to fixed income securities backed by subprime residential mortgages violates in its annual 10-K report.

3. The allegation by the Pension Fund that the CIBC underestimated the losses that the CDO investments would incur and violated GAAP in accounting for CDO losses are sufficiently specific under the Securities Litigation Uniform Standards Act of 1998 to permit the Pension Fund suit to proceed with its suit.

4. The allegation by the Pension Fund that the CIBC underestimated the losses that the CDO investments would incur and violated GAAP in accounting for CDO losses are sufficient to permit the Pension Funds suit to proceed as a violation of Rule 10b-5.

5. CIBCs statement that actual losses are not expected to be material and our actual exposure to loss as a result of involvement with the CDOs was approximately $729 million, qualify as forward looking statements which are immune from investor lawsuits under the safe harbor provision of PSLRA.