UPDATE 1-CIBC suspends employees accused of insider trading
* OSC says lawyer passed tips to CIBC advisers
* Accusations cover tips on four M&A deals
* Former Toronto-Dominion employees also accused (Adds details, statements from TD, law firm)
TORONTO, Nov 12 (Reuters) - Canadian Imperial Bank of Commerce (CM.TO) has suspended two employees accused by regulators of trading on insider information four M&A deals after allegedly being tipped by a Toronto lawyer.
The Ontario Securities Commission, Canada's main securities regulator, accused CIBC investment advisers Paul Azeff and Korin Bobrow of profiting on M&A deals between 2004 and 2007 on information passed along from Mitchell Finkelstein, a former partner at Davies Ward Phillips & Vineberg.
"As a result of the charges filed by the staff of the Ontario Securities Commission yesterday, these two individuals have been suspended immediately," CIBC said in a statement.
Shares of CIBC were down 2.3 percent at C$75.21, the weakest Toronto-listed bank on Friday.
Finkelstein is accused of "tipping" -- passing along information -- on four takeovers, including Barrick Gold's (ABX.TO) C$10 billion acquisition of Placer Dome in 2006.
The accusations are part of a broad case unveiled late on Thursday that also implicates two employees of Toronto-Dominion Bank (TD.TO).
The regulator said Finkelstein sought out and acquired material non-public information on the transactions, then passed it on to Azeff, whom he met when the two were fraternity brothers at the University of Western Ontario.
"Azeff knew or ought to have known that Finkelstein obtained the information in his capacity as a lawyer and that Finkelstein stood in a special relationship to each of the reporting issuers," the OSC said in a statement of allegation.
Azeff then allegedly shared the information with Brobow, his co-worker at CIBC's Montreal office, and both passed the information on to family members and clients.
In addition to the Barrick deal, Finkelstein is accused of passing on tips about Kohlberg Kravis Roberts' 2005 purchase of Masonite, Sherritt International's (S.TO) 2007 bid for Dynatec, and Vista Equity Partners takeover of MDSI Mobile Data solutions, also in 2007.
Also accused of illegally trading and tipping are Howard Jeffrey Miller and Man Kin Cheng, who are former employees of TD Waterhouse, a unit of Toronto-Dominion Bank.
According to the OSC, Miller learned of the pending deals from a client of Azeff.
According to the statement, the potential profit made on trades on the securities was more than C$3 million.
Finkelstein, who has not been accused of making trades himself, recently left his position at Davies.
Shawn McReynolds, managing partner at the law firm, said it has reviewed the allegations and has "concluded they are isolated to actions taken years ago by one individual".
Canada's insider trading enforcement record has been criticized heavily in the past, as several high-profile cases -- including the lone prosecution in the 1997 C$6 billion Bre-X gold fraud -- have failed to secure convictions or have failed on appeal.
Last year, Stan Grmovsek pleaded guilty to a series of illegal insider trades that stretched over a 14-year period and netted a total of about C$10 million. He was sentenced earlier this year to 39 months in prison.
($1=$1.01 Canadian) (Reporting by Cameron French)