Canada’s BMO books $834 million cost over U.S. Ponzi lawsuit loss By Reuters

(Reuters) -A U.S. jury on Tuesday discovered an area unit of Canada’s Financial institution of Montreal (BMO) chargeable for over $550 million in damages over a Ponzi scheme operated by a Minnesota businessman, main the financial institution to guide a cost of C$1.12 billion ($834.2 million).

Thomas Petters was discovered responsible in 2009 of orchestrating a $3.65 billion Ponzi scheme and sentenced to 50 years in jail.

The lawsuit in Minnesota sought to recoup almost $2 billion based mostly on sums Petters transferred from an account at Marshall & Ilsley Financial institution, which BMO purchased in 2011.

The sums grew to become unavailable for reimbursement to collectors when the fraud was uncovered in 2008, a trustee mentioned within the lawsuit.

The jury dominated the BMO unit “aided and abetted” Petters within the breach of fiduciary responsibility to his agency, Petters Firm Inc (PCI), inflicting hurt to PCI. Fiduciary responsibility includes motion taken in one of the best curiosity of one other individual or entity.

“BMO knew Petters’ fraudulent conduct constituted a breach of fiduciary responsibility to PCI and considerably assisted or inspired Petters to commit the breach,” the ruling learn.

The jury didn’t discover the BMO unit instantly aided the fraud.

The unit mentioned it might contest the jury’s verdict and award.

“We’re disenchanted with the jury’s verdict, which isn’t supported by the proof or the regulation,” a spokesperson for the unit mentioned in an announcement.

BMO mentioned the C$1.12 billion provision consists of an after-tax cost of C$830 million that it’s going to guide within the fourth quarter.

($1 = 1.3426 Canadian {dollars})