Business

CIBC mutual fund settlement could pay eligible investors about $32 each

The $11-million class action alleges trailing commissions were improperly paid to discount brokers.

By Owen Fitzgerald, Business Reporter
November 11, 2026

Explainer

Eligible investors have one week left to claim a share of an $11-million class-action settlement involving CIBC and Renaissance mutual funds. The lawsuit alleged that trailing commissions were improperly paid to discount brokers, which typically do not provide personalized investment advice. CIBC and its affiliates denied any wrongdoing, and the settlement is not an admission of liability. The deadline for former fund holders to submit a claim is Nov. 18, 2026.

The class action alleged that the defendants breached their duties because the trailing commissions paid to discount brokers were "excessive, inflated and/or unearned." These commissions are fees paid to mutual fund dealers or advisers to compensate for their advice. The lawsuit claimed that since discount brokers generally provide only order-execution services and no advice, the fees were not justified. CIBC was also allegedly using money from mutual fund assets to pay these commissions. The settlement documents say these brokers typically provide "order-execution only services."

Who is eligible for the settlement?

Anyone who held units of a CIBC mutual fund or a Renaissance mutual fund on or before Sept. 5, 2025, is eligible for compensation. This excludes investors who held the funds through a discount brokerage account. Renaissance Investments is a subsidiary of CIBC. Examples of discount brokers listed in settlement documents include BMO InvestorLine, CIBC Investor’s Edge, National Bank Direct Brokerage, RBC Direct Investing, Scotia iTRADE, TD Direct Investing, CI Direct Trading, Qtrade, Desjardins Online Brokerage, HSBC InvestDirect, Laurentian Bank Discount Brokerage, Wealthsimple, Questrade, and Interactive Brokers. They may have had different names in the past. Investors who qualify generally would have held eligible mutual funds outside of discount brokerage accounts, such as through bank branches or full-service advisors.

How do eligible investors get paid?

Current holders of CIBC mutual funds, as well as current and former holders of Renaissance mutual funds, will be compensated automatically. Their portion of the settlement will be deposited directly into their existing mutual fund accounts or other related funds, and no claim is necessary. However, former CIBC mutual fund holders who no longer have those investments must submit a claim form by the Nov. 18 deadline to receive payment. Those eligible claims will be paid by cheque or e-transfer. Claim forms can be submitted online at the class-action settlement website. Those who held both CIBC mutual funds and Renaissance mutual funds might be compensated for both of those claims, the class-action site says.

How much money could claimants receive?

The total settlement is $11 million, but the amount distributed will be lower after legal fees, administrative expenses and other costs are deducted. The law firm that oversaw the class action stands to earn more than $3.6 million in legal fees, according to court documents. The settlement's plan of allocation suggests each eligible claim could be entitled to about $32. "If the Net Former Holder CIBC Fund is sufficient to make payment of $32.00 to each eligible Claimant, the Administrator shall issue payment of $32.00 by e-transfer or cheque to each eligible Claimant," the plan states. The final amount could be less than $32 if there are not enough funds to pay each claim in full. "If the Net Former CIBC Holder Fund is insufficient to make payment of $32.00 to each eligible Claimant, the Administrator shall calculate each Former CIBC Holder’s payment by pro rating the Net Former CIBC Holder Fund between each eligible Claimant, and the Administrator shall send each Claimant an e-transfer or cheque of this pro rated amount." It is unclear exactly how much claimants could get, as the number of potential claimants has not been disclosed.

What is the background of the lawsuit?

The class-action lawsuit, which originated in 2022, questioned CIBC's asset management practices regarding trailing commissions paid to discount brokers. The settlement was approved by the Ontario Superior Court of Justice. The defendants named are Canadian Imperial Bank of Commerce, CIBC Trust Corporation and CIBC Asset Management. The lawsuit alleged CIBC was paying trailing commissions with funds from its mutual fund assets. A similar class-action settlement involving trailing commissions at TD bank was reached last year. The settlement agreement happened when legal parties negotiated satisfactory terms that avoids the need to fight the lawsuit in court.

With files from CBC News, Global News and BNN Bloomberg