Time is running out for those who qualify to submit a claim for compensation from an $11 million CIBC class-action settlement involving mutual fund commissions paid to discount brokers.
Eligible claims need to be submitted by Nov. 18, 2026 to qualify for compensation.
With about one week left to file a claim, here’s everything to know.
What the lawsuit alleges CIBC did
The lawsuit alleged CIBC and Renaissance mutual funds paid trailing commissions to discount brokers that were “excessive, inflated and/or unearned,” as these brokers generally do not provide personalized investment advice – the service those fees are typically intended to compensate.
CIBC and its affiliates denied wrongdoing, and a settlement agreement is not necessarily an admission otherwise. Usually, a settlement agreement happens when legal parties negotiate satisfactory terms that avoids the need to fight the lawsuit in court.
Examples of discount brokers, according to the settlement website, are BMO InvestorLine, CIBC Investor’s Edge, National Bank Direct Brokerage, RBC Direct Investing, Scotia iTRADE, TD Direct Investing, CI Direct Trading, Qtrade, Desjardins Online Brokerage, HSBC InvestDirect, Laurentian Bank Discount Brokerage, Wealthsimple, Questrade, and Interactive Brokers. They may have had different names in the past.
CIBC and its asset management arm was allegedly using money from mutual fund assets to pay these trailing commissions to discount brokers.
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This would be a normal practice provided the brokers were giving clients a service of personalized and sometimes ongoing investment advice and services, but the settlement documents say these brokers typically provide “order-execution only services.”
A similar class-action settlement involving trailing commissions involved TD last year.
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Who qualifies for compensation?
Investors who qualify for a payout generally would have held, or are still holding eligible mutual funds outside of discount brokerage accounts, such as through bank branches or full-service advisors, starting up to or before Sept. 5, 2025.
Those who currently hold mutual funds through CIBC and current or former Renaissance fund holders will be compensated automatically without needing to file a claim and will see the funds deposited through their respective mutual funds or other related funds.
However, former CIBC mutual fund holders who no longer have those investment products with the firm have until Nov. 18, 2026 to file a claim for compensation. Those eligible claims will be paid by cheque or e-transfer where applicable.
How much could be paid out?
Although the settlement about is $11 million, the amount that winds up being distributed among eligible claimants is determined after related legal fees, administrative expenses and other costs are deducted.
It also isn’t clear how much eligible claims could be worth because the number of potential claimants who qualify have not been disclosed.
However, the settlement’s plan of allocation document suggests each eligible claim could potentially be entitled to compensation of about $32.
“If the Net Former Holder CIBC Fund is sufficient to make payment of $32.00 to each eligible Claimant, the Administrator shall issue payment of $32.00 by e-transfer or cheque to each eligible Claimant,” the document says.
Eligible claims may wind up being less than $32 if there isn’t enough money to pay every claim.
“If the Net Former CIBC Holder Fund is insufficient to make payment of $32.00 to each eligible Claimant, the Administrator shall calculate each Former CIBC Holder’s payment by pro rating the Net Former CIBC Holder Fund between each eligible Claimant, and the Administrator shall send each Claimant an e-transfer or cheque of this pro rated amount.”
Those investors who think they may be entitled to compensation can file a claim online before the deadline.
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