A group of investors has become the first to launch a "multibillion-dollar" class-action lawsuit against the Canadian Imperial Bank of Commerce, alleging misrepresentations about the bank's exposure to the U.S. subprime mortgage market.

The claim alleges that the bank misrepresented its total exposure to U.S. subprime loans by saying it "was 'not a major issue' when, in fact, the bank had exposure to billions of dollars of losses."

It was filed with the Ontario Superior Court by Toronto legal firm Rochon Genova LLP.

Lawyer Joel Rochon, who is heading the lawsuit, said that CIBC "ignored its legally required disclosure obligations to the detriment of the investing public."

The lawsuit likely won't be the last for Canadian banks tied to the credit crisis, suggested Chris Blumas, a bank analyst at Morningstar.

"CIBC right now, of the Canadian banks, is the one that's had the biggest exposure to subprime, and has been hurt the most. It would make sense that since they face the most headline risk, they face the most litigation as well," he said.

"I think class-action litigation practices may be more favourable in the U.S., so you might see some New York law firms pick up on this."

The suit covers investors who bought shares in the company between May 31, 2007 and Feb. 28, 2008.

None of the allegations has been proven in court, nor has the suit received official certification as a class action.

During that time, the suit says, CIBC common shares were artificially inflated until the bank provided "more complete disclosure, through a series of partial disclosures" about its exposure, filed in late 2007 and early 2008.

"It is alleged in the claim that CIBC, over a period of months, repeatedly misled the market and investors as to the size of the bank's exposure to the U.S. subprime market and also to the volatility of its related investments," Rochon said in a release.

"Investors appear to have lost billions due to the bank's misrepresentations and its failure to manage investments prudently."

CIBC denied the allegations in a statement e-mailed to The Canadian Press and said it would "vigorously defend" itself.

"CIBC is confident that, at all times, its conduct was appropriate and that its disclosure met applicable requirements," spokesperson Rob McLeod wrote.

He declined to make any further comment.

CIBC is the Canadian bank that has been hit hardest by the credit crunch in the United States, with writedowns of more than $3 billion from various credit-related items.

The bank's shares closed up $3.17, or 5.3 per cent, at $63.29 on the TSX yesterday.