By Jonathan Stempel

NEW YORK (Reuters) - A U.S. federal judge dismissed a shareholder lawsuit accusing Canadian Imperial Bank of Commerce and four executives, including Chief Executive Gerald McCaughey, of misleading investors about the bank's exposure to subprime mortgages.

Judge William Pauley of Manhattan federal court rejected claims on Wednesday in the class-action case that CIBC committed securities fraud by making at least 14 misrepresentations between May 2007 and May 2008 and understating its risk from owning mortgage-backed securities.

He noted many lenders failed to forecast the meltdown that led to Lehman Brothers Holdings Inc's demise and the end of Bear Stearns Cos' and Merrill Lynch & Co's independence, as well as massive losses industrywide.

"Knowledge of a general economic trend does not equate to harboring a mental state to deceive, manipulate, or defraud," Pauley wrote in a 28-page opinion. "CIBC, like so many other institutions, could not have been expected to anticipate the crisis with the accuracy (the) plaintiff enjoys in hindsight."

The Plumbers & Steamfitters Local 773 Pension Fund is the lead plaintiff in the case. Robert Rothman, a lawyer at Coughlin Stoia Geller Rudman & Robbins LLP representing the fund, did not immediately return a call seeking comment.

CIBC spokesman Rob McLeod said the bank was pleased with the decision and said the allegations lacked merit.

Noting that CIBC took six write downs during the class period, Pauley said the bank "chose an incremental measured response" that, "while erroneous in hindsight, is as plausible an explanation for the losses as an inference of fraud."

He added that it would be "nonsensical to impute dishonest motives" to the executives, given that each suffered large losses in their common stock holdings and compensation.

In late afternoon trading, CIBC shares were down 8 cents at C$75.39 in Toronto.

The case is Plumbers & Steamfitters Local 773 Pension Fund v. Canadian Imperial Bank of Commerce et al, U.S. District Court, Southern District of New York, No. 08-08143.

(Reporting by Jonathan Stempel; editing by Andre Grenon)