Payment of trailing commissions to discount brokers subject of proposed class action

By The IJ Staff | September 19 2018 11:30AM

Siskinds LLP and Bates Barristers P.C. announced Sept. 19 that they have filed a proposed class action against the Canadian Imperial Bank of Commerce and CIBC Trust Corporation regarding trailing commissions paid to online/discount brokers on CIBC mutual funds.

“The action alleges that the Defendants pay trailing commissions to discount brokers through which the CIBC mutual funds are sold, and investors who hold these funds in discount brokerages receive no value for the trailing commissions paid. The action seeks compensation for those investors,” said the law firms in a statement.

The discount brokers include, among others, CIBC Investor's Edge, BMO InvestorLine, RBC Direct Investing, Scotia iTRADE, TD Direct Investing, National Bank Direct Brokerage, Desjardins Online Brokerage, HSBC InvestDirect, Laurentian Bank Discount Brokerage, Qtrade Investor, and Virtual Brokers, stated Siskinds LLP and Bates Barristers P.C.

The law firms say they “would like to speak with individuals who held or hold Renaissance mutual funds (which are part of the CIBC mutual fund family) or Series A mutual funds of other mutual fund families through a discount broker.”

This is the third proposed class action filed by Siskinds LLP and Bates Barristers P.C. relating to the practice of mutual fund managers paying trailing commissions on mutual funds held through the discount brokerage channel. Proposed class actions have also been filed against TD Asset Management Inc., the trustee and manager of TD mutual funds, and 1832 Asset Management L.P., the trustee and manager of Scotia and Dynamic mutual funds.