One of the key figures in Eliot Spitzer's initial rounds of mutual fund market timing cases targeting Canary Capital has settled a lawsuit with his then-employer.

In February, 2004, Paul Flynn, then a managing director of equity investments with Canadian Imperial Bank of Commerce (CIBC) based in New York City, was accused by the New York Attorney General and the SEC of arranging financing for hedge funds that were making market-timing trades in mutual funds (see The MFWire, February 24, 2004).

At the time of his indictment in August 2005, Susan Necheles, Flynn's attorney, said that "Nobody believed this was criminal," and explained that the defendants were simply "putting a trade through omnibus accounts." (see The MFWire, August 30, 2005).

Those criminal charges were later dropped by Spitzer's office in November 2005. The SEC dropped its civil charges in August 2006. CIBC paid $125 million in restitution to settle its involvement.

This week CIBC officials said that they had reached an "amicable resolution" with Flynn. The settlement ends a suit Flynn brought against CIBC in which he claimed the bank misrepresented his actions with regards to the market-timing matter.

CIBC officials also said that they were "sympathetic" to the problems the matter had created for Flynn in the nearly five years since the initial accusations. They also acknowledge that all of the charges against him have been dropped.

They added that Flynn is now a consultant to the bank. They did not provide further details of the settlement. 

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