Canadian Imperial Bank of Commerce conducted an internal investigation into alleged misbehaviour on its trading floor amid claims of sexual harassment and a toxic work environment, The Globe and Mail has learned.
Earlier this year, the bank hired an outside firm to question trading floor staff about a series of alleged incidents, according to three people familiar with the situation. Roughly 20 employees were interviewed, said a source involved in the process.
The investigation is linked to a wrongful-dismissal lawsuit filed in December by Diane Vivares, a former executive assistant to the head of equity markets. Ms. Vivares, who was terminated in October, is seeking at least $1.175-million in damages from CIBC World Markets and Kevin Carter, a former executive director who worked in the dealer's equity derivatives group.
Ms. Vivares is seeking damages from the bank for allegedly failing to protect her from a "sexually poisoned and toxic work environment" and from Mr. Carter for allegedly sexually assaulting her at a staff Christmas party in 2007. Ms. Vivares claims in court documents that she reported "incidents of sexual assault, harassment, bullying and discrimination" to several senior managers.
Both CIBC and Mr. Carter deny the allegations, which have not been proven in court.
"While we are unable to comment on the specifics of the case as it is before the courts, it is important to note that some of the complainant allegations date back almost 10 years and many of the individuals named are no longer employed at CIBC," the bank said in an e-mailed statement to The Globe.
"We only became aware of the complainant allegations when she filed a lawsuit, following her departure from CIBC. Whenever any harassment issue is raised through our confidential hotline or any other avenue of escalation, we investigate thoroughly early and take disciplinary action, including termination, if the allegations are proven.
"Our most basic promise to our team is that everyone be treated fairly, with decency and respect, and feel safe and secure when we come to work," the bank said.
"We are committed to a culture of caring and doing the right things for our people. No form of harassment, discrimination, bullying or any other kind of violence in the workplace will be tolerated."
The allegations come amid a strategic overhaul at CIBC that has touched the bank's wholesale unit, Bay Street's top equity trader by market share. Since chief executive officer Victor Dodig took the reins in September, 2014, CIBC has taken steps to cut $600-million in costs across the bank.
One of the co-heads of CIBC World Markets left last fall and the heads of equity trading and equity sales left the bank in February in a restructuring.
Larry Acton, the former head of equity trading who had also been appointed to the dealer's global leadership team last fall, is not named as a defendant in Ms. Vivares's lawsuit, but she alleges in her statement of claim that he made inappropriate sexual comments directed at her.
Mr. Acton declined to discuss the case but said he was told his dismissal in February had nothing to do with the bank's internal investigation.
Mr. Dodig's overhaul has included efforts to revamp the bank's culture – particularly at the executive level. He has been keen on promoting gender diversity, naming three women to his executive committee. He also sits on the advisory board of Catalyst Canada, which promotes the advancement of women in the workplace.
One lawyer who deals frequently with sexual harassment cases said the issue still comes up on Bay Street, despite efforts in recent years to tame the male-dominated culture that often exists on trading floors.
"These things still happen," said Susan Vella, a top lawyer on the subject at Rochon Genova LLP, who has handled many Bay Street cases and also advised Ontario's Liberal government to help draft sexual harassment legislation that was introduced last year.
The problem, Ms. Vella said, is that the public rarely hears about issues such as sexual touching or sexualized language in the workplace.
"The only time we hear about anything is if it is elevated to the level of either a criminal charge, or if someone decides they've had it, their career's pretty much ruined anyway – [or maybe] they're going to go into another area so they can't be hurt by it," which is when they have the courage to sue for damages.
But even then, she said, many damage suits are never heard of because "most of those cases are settled out of court."
CIBC has dealt with allegations of misbehaviour in its capital markets group before.
In 2011, a female employee complained about feeling compelled to visit an adult entertainment club in Vancouver with co-workers; upon finding out, CIBC brought in a third party to conduct an investigation, according to two people familiar with the matter.
Afterward, the bank sent the message that such behaviour would not be tolerated by docking some senior employees' pay and deferring promotions.
Ms. Vivares, 51, an employee from 2005 to 2015, alleges she was groped by Mr. Carter at the bank's annual Christmas party at Reds Tavern in downtown Toronto nine years ago. In the middle of a conversation, he asked her if she wanted to go somewhere private with him, she alleges in court documents. When she said no, the lawsuit claims, "he proceeded to shove his hand down the inside of her skirt." She pushed him away, but she alleges that he did it again.
As of December, Mr. Carter is no longer employed by the bank. A lawyer representing him said "there is absolutely no merit to the allegations against Mr. Carter. They are scurrilous and false and are being vigorously defended."
The lawyer added that Mr. Carter "left his job as a result of a larger restructuring at CIBC World Markets" and that his departure "was unrelated to these allegations."
Ms. Vivares, who declined to comment for this story through her lawyer, alleges that several senior employees were aware of the incident, one of whom apologized to her the next day on Mr. Carter's behalf. When contacted to verify her claim, the employee, who is no longer with the bank, wrote: "At this time I'll refrain from commenting."
The lawsuit also alleges that in April, 2014, Stephen Pynn, a junior trader, approached Ms. Vivares "unsolicited and showed her a pornographic picture of his girlfriend's vagina on his phone."
Two senior female employees, one of whom worked in human resources, were allegedly aware of the incident. When approached by the human resources director about it, Ms. Vivares said little.
In her lawsuit, she says she was "too humiliated and traumatized by the incident to speak about it at that time" and that she "feared she would face reprisal if she reported the incident." Mr. Pynn is no longer employed by the bank and did not reply to multiple requests for comment.
A third incident is alleged to have taken place in or around March, 2015, when Ms. Vivares found a sexually explicit note on her desk. The note, written by someone else but made to appear that she wrote it, requested that Mr. Pynn meet her in a boardroom for sexual intercourse. Ms. Vivares claimed she was shocked by the contents and approached the traders "who appeared to be laughing at her expense." Mr. Acton allegedly joked that Ms. Vivares wrote the note.
The lawsuit also alleges "sexual comments and/or innuendo were also used quite often in the workplace." Examples given include Mr. Acton telling Ms. Vivares another female colleague needed a "big [expletive] black guy to fix her"; Mr. Acton approaching Ms. Vivares and saying "I'm soft now" and then pointing to his private area; and Lou Mouaket, the executive director of portfolio trading, wearing a blazer with "Fuck Bitches, Make Money" – a riff on lyrics from a Junior M.A.F.I.A song – embroidered on the inside. Mr. Mouaket did not reply to multiple requests for comment.
Ms. Vivares alleges "the bank either knew or ought to have known that such behaviour was occurring in the workplace in breach of the bank's workplace policies, and failed to take any steps to address and eliminate it." Her lawyers have requested the case be sent to trial.
The bank argues in its statement of defence that it did nothing wrong. "CIBC denies that [Ms.] Vivares was subject to a sexually poisoned and toxic work environment," it wrote, adding that the bank took "all reasonable steps to provide [her] with a work environment that was free from harassment, discrimination and/or bullying."
"Despite the obligation to report, the multiple resources available, and CIBC's commitment to protect employees from retaliation, [Ms.] Vivares did not report the alleged incidents of sexual assault, harassment, bullying or discrimination," the bank argues.
As for the incident involving Mr. Carter at the Christmas party, CIBC argued that "[Ms.] Vivares waited eight years to raise this allegation, immediately following the termination of her employment."
In its e-mailed statement to The Globe last week, CIBC said its commitment to treat everyone fairly "is clearly articulated in our code of conduct and anti-harassment policies and is supported by robust policies and mandatory training. Any person who reports a potential breach of our code of conduct will be supported and protected."