Bank fined $80m over Enron role

The fallout from Enron's collapse is still being felt

Canadian Imperial Bank of Commerce (CIBC) has agreed to pay $80m (£45m) to settle allegations it helped Enron hide debts and inflate earnings.

Two CIBC executives also will pay fines totalling $600,000 following an investigation by the Securities and Exchange Commission (SEC).

The discovery of widespread fraud at Enron led the Houston-based energy company to collapse in 2001.

Citigroup, JP Morgan and Merrill Lynch have all previously paid fines.

Crackdown

The shock waves of Enron's collapse are still being felt throughout the financial world, with corporate accounting put under the microscope and stock markets still jittery.

Italian food group Parmalat is currently embroiled in a battle for solvency that many analysts are comparing to Enron and its problems.

According to Stephen Cutler, the SEC's enforcement division director, the IBC ruling "demonstrates that neither financial institutions nor their executives can hide behind the technical complexities of structured transactions".

The fine will comprise $37.5m to repay money earned from transactions, $37.5m in penalties and $5m in interest.

CIBC executive vice-president Daniel Ferguson and former executive Mark Wolf agreed to pay fines without admitting or denying any wrongdoing.

Mr Ferguson will pay $563,000, while Mr Wolf will hand over $60,000

CIBC President John Hunkin said: "We are pleased to have put a major portion of the Enron matter behind us".

"We still have various Enron-related civil suits pending, and we intend to defend ourselves vigorously in those cases".

Debts

Enron collapsed in December 2001, leaving behind debts of about $67bn. It was the first in a wave of corporate scandals - and at the time, the biggest corporate bankruptcy in history.

Thousands of Enron employees lost their jobs and most of their retirement funds, while tens of thousands of shareholders lost all of their investment.

Enron's downfall came after rumours had shattered market confidence for many weeks.

In October 2001 the company finally owned up to its corporate failings and admitted that its profits and its asset values had been hugely inflated. In December Enron was declared bankrupt.