Paul Flynn, the former Canadian Imperial Bank of Commerce official who was arrested two years ago and charged with five felonies, is free of the legal entanglement which developed at his former job as a managing director at Canadian Imperial Bank of Commerce.
The SEC’s enforcement division, which has three weeks to appeal the ruling to the five-member commission, was seeking to have Flynn fined up to $2 million and banned from the securities industry. The division said in its February 2004 lawsuit that from 2001 to 2003 Flynn “knew or was reckless in not knowing” that the hedge funds, Canary Capital Partners LLC and Samaritan Asset Management were engaging in the improper trades.
But Judge Robert G. Mahony, who presided over a trial in March, ruled that Flynn was not aware that any actions he took helped the hedge funds make improper trades. He ruled that Security Trust, a Phoenix-based retirement plan, and also the two hedge funds, had broken security rules with their trading strategies.
Last November, state Attorney General Eliot Spitzer requested and got the dismissal of five felony counts he had lodged against Flynn. A criminal conviction could have resulted in Flynn, a Canadian citizen, being deported from the United States.
“We are very pleased with the SEC’s decision not to appeal,” he said. “It finally puts an end to Paul’s long nightmare.”
Flynn “is now eager to get back to life as normal, along with his wife and children,” Piper Hall, spokeswoman at Flynn’s Washington-based law firm, Dickstein Shapiro, said in an e-mail.
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