TORONTO — Investors who held CIBC or Renaissance mutual funds may be eligible for a share of an $11 million class-action settlement, with a deadline to apply approaching next month. The settlement resolves a lawsuit alleging that trailing commissions were improperly paid to discount brokers. The Ontario Superior Court of Justice approved the settlement, which does not include an admission of liability from CIBC or CIBC Trust Corporation. Former fund holders must submit a claim by Nov. 18, 2026, to receive compensation.
The class action, launched in 2022, alleged that trailing commissions were incorrectly paid to discount brokers, such as Scotia iTRADE or Wealthsimple, which execute trades but do not typically provide personalized financial planning. The lawsuit claimed that since no advice is given by these brokers, the fees were "excessive, inflated and/or unearned." It also alleged CIBC paid these commissions using mutual fund assets. The settlement was reached as an efficient compromise, according to Verita Global Inc., the law firm representing the plaintiff.
Eligibility extends to anyone who held units of a CIBC mutual fund or a Renaissance mutual fund on or before Sept. 5, 2025, except those who held the funds through a discount broker. Renaissance Investments is a subsidiary of CIBC. Current holders of CIBC or Renaissance mutual funds will receive their portion of the settlement automatically, deposited directly into their existing funds, with no claim necessary.
Former CIBC mutual fund holders, however, must file a claim form by the November deadline. Those who held both CIBC and Renaissance funds may be compensated for both claims. The exact payout per claimant is not fixed, but the plan of allocation indicates it could be about $32, provided the settlement fund is sufficient. If the fund is insufficient, the amount will be prorated.
The class action was brought on behalf of individuals who held units of a CIBC mutual fund trust or a Renaissance mutual fund trust at any time on or prior to Sept. 5, 2025, other than through a discount broker. The lawsuit questioned CIBC's asset management practices, specifically the payment of trailing commissions to discount brokers who are legally barred from offering investment advice. Trailing commissions are fees paid to mutual fund dealers or advisers to compensate for their advice. The settlement highlights the importance of understanding the fees associated with financial products and the obligations of financial institutions. More information about the settlement and the claims process is available at cibcmutualfundssettlement.com.