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Friday, February 06, 2004

CIBC Honcho Ousted

by: Nicole Halsey

David Kassie, vice chairman of Canadian Imperial Bank’s investment banking group has resigned according to some reports. Others say that the bank's star dealmaker was fired yesterday during a private meeting with CIBC chief executive officer John Hunkin.

In any case, Kassie, whose reputation as an aggressive deal-maker made him one of the country's richest bankers is out. Sources told The Globe and Mail that during the meeting with Hunkin, Kassie was informed that he would not be suceeding Hunkin (which was expected) and that CIBC's board of directors felt that new leadership was needed in the wake of the scandal engulfing the company.

The company was already licking it wounds after agreeing more than a month ago to pay $80 million to US regulators to settle allegations that it aided and abetted Enron in the accounting fraud pepertrated at that company.

Earlier this week, one of the bank's former New York executives, Paul Flynn, was arrested and charged criminally by U.S. regulators for allegedly participating in an illegal mutual-fund trading scheme.

Gerry McCaughey, the vice–chair of wealth management, has been tapped to replace Kassie. McCaughey joined Merrill Lynch in 1981 as an account executive, and became vice-chair of wealth management at CIBC in 2002.

"David was a valued member of my senior executive team and was a major force in making CIBC World Markets the Canadian investment-banking leader that it is today," said Hunkin in a statement. "I would like to thank David for his many contributions to CIBC's success and wish him the very best in his future endeavours."

Kassie joined Wood Gundy, an investment firm later purchased by CIBC in 1979. He steadily climbed the ranks, while working closely with Hunkin, and was named head of CIBC World Markets in 1999.

Under Kassie's leadership, CIBC became one of Wall Street's leading financiers during the Internet boom of the 90s and for the bank's willingness to participate in riskier transactions.

The bank lost its glow after it became associated with accounting scandals at companies like Enron, Global Crossing and Livent.  

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