By Michael Quiel
Investigative Reporter
On March 30, 2026, the US District Court for the Southern District of New York (Case No. 1:24-cv-07972) firmly rejected Canadian Imperial Bank of Commerce’s (CIBC) motion to dismiss the core spoofing claims contained in Quantum BioPharma Ltd.’s (QNTM) $700 million market manipulation lawsuit filed against CIBC. This crushing legal defeat allows Quantum’s federal securities fraud allegations under Section 9(a), Section 10(b), and Rule 10b-5 of the Exchange Act to move forward aggressively into discovery.
The federal judge’s ruling found the following:
2. Federal Securities Claims (Exchange Act §§ 9 & 10(b)) – Survive The court found the Amended Complaint adequately pleads (under Rule 9(b) and the PSLRA):
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- Manipulative acts — detailed spoofing cycles, order data, probabilistic imputation, and statistical anomalies suffice to show artificial price depression.
- Scienter — strong inference from (a) massive cancellation ratios (median 5,100 shares canceled per purchase vs. industry 1,300), (b) stark imbalance between baiting sell orders and executed buys, (c) algorithmic trading controls that should have detected the pattern, and (d) other red flags (naked short selling allegations, CEO’s prior complaints to CIBC).
- Loss causation and reliance — spoofing immediately before Quantum’s own share sales/issuances at depressed prices.
- Timeliness — claims not time-barred.
This ruling is a major victory for Quantum and delivers a serious blow to CIBC’s attempt to kill the case.
At the center of the scandal remains Canadian Imperial Bank of Commerce (CIBC) Chief Compliance Officer Andrea Nalyzyty — the executive whose primary job was to detect and stop exactly this type of alleged predatory trading. Instead, she continues to reportedly manipulate the very system she is paid to protect, presiding over years of unchecked spoofing that allegedly targeted Quantum’s stock while the company was developing treatments for Multiple Sclerosis (MS) — and she reportedly does so even in the face of a United States Federal Court Ruling against CIBC.
The court’s 42-page Opinion & Order accepts those allegations as true at this stage and finds them detailed enough to survive Rule 9(b) and PSLRA scrutiny. The federal judge catalogued 747 spoofing cycles — 618 by CIBC alone — driving the stock down an average of 86.38 basis points per episode on Canadian exchanges and 68 basis points on U.S. markets. That is alleged textbook spoofing.
What has been CIBC’s response? To our knowledge, the public record is silent. No investigation has been announced, no trading curbs have been reported, and no compliance overhaul has been disclosed — just stone-cold silence from CIBC and its CEO Harry Culham.
Meanwhile, according to the latest TSX Market Makers List maintained by the Toronto Stock Exchange and the Canadian Investment Regulatory Organization, CIBC continues to be officially designated as a market maker with designation number 79 as of April 16, 2026. CIBC apparently has no intention of stepping down from this role.
This is a serious conflict of interest. While Quantum BioPharma’s $700 million lawsuit alleging market manipulation by CIBC (and others) is still actively moving forward in court, CIBC has chosen not to withdraw as market maker. By remaining in this position, CIBC could continue as reported to influence the stock price through the very practices it is being sued over — potentially destroying shareholder value and undermining Quantum BioPharma’s ability to achieve a fair outcome in the lawsuit.
As previously reported by the US~Observer, Andrea Nalyzyty has sat atop CIBC’s compliance apparatus while the bank racked up penalty after penalty: $1.225 million from FCAC in 2022; $3.4 million from British Columbia regulators in 2023; $119,000 from IIROC in 2022; a staggering $42 million combined CFTC/SEC fine in 2024; $1.3 million from FINTRAC in 2023; and $425,000 from FINRA in 2025. (See: https://usobserver.com/capybara-walk-again-cibcs-andrea-nalyzyty-faces-scrutiny-for-alleged-compliance-failures-in-market-manipulation-case/)
Each fine screamed the same message: systemic supervision failures. Yet Nalyzyty continued collecting her paycheck while QNTM’s stock reportedly bled. The human cost is grotesque. Every basis point the spoofers allegedly shaved off QNTM’s price translated into less capital for Lucid-MS trials. Every delayed dollar potentially meant more MS patients trapped in wheelchairs instead of walking. If these allegations are proven, Andrea Nalyzyty enabled a calculated assault on a company trying to cure one of the cruelest diseases on earth.
The court ruling makes clear that CIBC and the Royal Bank of Canada routed high-speed algorithmic orders into U.S. markets, used Direct Market Access under SEC Rule 15c3-5, and acted as gatekeepers who were legally required to police customer order flow. The federal judge found Quantum’s statistical evidence — Net New Size, Pre-Trade Short Order Life Percent, and probabilistic imputation of near-simultaneous U.S. and Canadian trades — more than sufficient at the pleading stage. CIBC is now stuck in a New York federal courtroom attempting to defend against Quantum’s allegations.
Is CIBC CEO Harry Culham culpable since the federal court has now validated the seriousness of the allegations against his company?
The US~Observer demands answers. Quantum and the MS community deserve them. Discovery will open the books on CIBC’s internal controls, compliance logs, and executive communications.
Source Article: United States District Court, Southern District of New York, Quantum BioPharma Ltd. v. CIBC World Markets, Inc. et al., Opinion & Order, Case No. 1:24-cv-07972 (ER), Document 46, filed March 30, 2026 (42 pages); original internal draft “FINAL 3-5-2026 Capybara Walk Again.docx.”
Referenced External Stories and Reports
- Quantum BioPharma Amended Complaint & Lawsuit Documents – https://www.quantumbiopharma.com/quantum-biopharma-vs-banks
- CTV News – “Was a Canadian company’s multiple sclerosis research nearly derailed by market manipulation?” (2026) – https://www.ctvnews.ca/business/article/was-a-canadian-companys-multiple-sclerosis-research-nearly-derailed-by-market-manipulation/
- CTV News – “Inside a Canadian biotech firm’s fight to prove it’s a victim of stock spoofing” (2026) – https://www.ctvnews.ca/health/article/inside-a-canadian-biotech-firms-fight-to-prove-its-a-victim-of-stock-spoofing/
- CTV News – “Market manipulation cases trending up in Canada, regulator data” (2026) – https://www.ctvnews.ca/business/article/market-manipulation-cases-trending-up-in-canada-regulator-data/
- Harrington Global Opportunity Fund v. CIBC World Markets Corp., 2023 WL 6316252 (S.D.N.Y. Sept. 28, 2023).
- All prior regulatory penalty releases (FCAC 2022, B.C. 2023, IIROC 2022, CFTC/SEC 2024, FINTRAC 2023, FINRA 2025).
Editor’s Note: All sources are publicly available or directly obtained. The US~Observer encourages readers to review the full court Opinion & Order. Submit tips confidentially here or call 602-960-4609.
