The U.S. Securities and Exchange Commission settled administrative proceedings against CIBC World Markets Corp. today on allegations that it violated rules governing political contributions by broker-dealers to issuers of municipal securities.

In the order issued today, the commission found that CIBC violated the rules by performing securities work for the State of California during the two years after CIBC contributed US$10,000 to former California Governor Gray Davis’s re-election campaign in 2002. The commission also found that CIBC violated related rules by failing to disclose in periodic reports and to maintain the requisite records of, CIBC’s contribution to the Davis campaign and five additional political contributions made by CIBC executives to other candidates in 2001 and 2002.

The SEC also instituted administrative proceedings against, and accepted settlement offers from three individuals who caused CIBC’s violation of the rule.

To settle the case, they consented, without admitting or denying the commission’s findings, to cease and desist; disgorge the US$379,852 it received in underwriting fees from California during the relevant period, plus US$42,106 in prejudgment interest; and, pay a civil penalty of US$75,000.

In determining to accept CIBC’s offer of settlement, the commission said it considered the cooperation it provided during its investigation and the remedial acts promptly undertaken by CIBC after learning of the violations.