CIBC Mellon Trust settles with U.S. stock regulator

…she couldn't elaborate on the SEC's assertion the company was unco-operative in the investigation. "We strive to have good relationships with all our regulators, and we can't comment on the SEC's position regarding our co-operation in this matter."

The Toronto Star
February 17, 2005

CIBC Mellon Trust settles with U.S. stock regulator
Transfer agent to pay $5 million U.S. fine. Accused of failing to co-operate in probe.
Bloomberg News

New York—CIBC Mellon Trust Co., a transfer agent, was fined $5 million (U.S.) for failing to co-operate with American regulators probing whether it accepted bribes from a now-defunct telecommunications company.

The joint venture of the Canadian Imperial Bank of Commerce and Mellon Financial Corp. neither admitted nor denied allegations by the U.S. Securities and Exchange Commission. The settlement included payments of $889,773 in disgorgement and $140,270 in interest, according to the SEC.

A manager at CIBC Mellon, Alnoor Jiwan, was approached by two officers of Pay Pop Inc. in 1998, who asked whether CIBC Mellon could issue Pay Pop shares without a required disclaimer stating the securities weren't registered with the SEC, the regulators said.

The SEC alleged that Jiwan knew the securities weren't registered with U.S. regulators and agreed to the transaction anyway. Jiwan allegedly agreed to act as a transfer agent, which issues stock certificates, in return for a total of 820,000 Pay Pop shares, according to the SEC's complaint.

The SEC cited CIBC Mellon for acting as an unregistered broker and transfer agent and for offering to sell unregistered securities.

Jiwan is no longer employed at CIBC Mellon, according to company spokeswoman Cheryl Ficker.

"Mr. Jiwan's employment ceased in 1999 immediately following the company's discovery of his activity," Ficker said. "It was also in 1999 that all business dealings with Pay Pop ended."

Ficker said she couldn't elaborate on the SEC's assertion the company was unco-operative in the investigation. "We strive to have good relationships with all our regulators, and we can't comment on the SEC's position regarding our co-operation in this matter."


Risks: U.S. Securities and Exchange Commission, Canada, 20050217 CIBC Mellon

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