The U.S. Securities and Exchange Commission says BMO has agreed to pay more than US$40 million to settle charges related to the bank’s alleged supervision failure in bond selling.
The regulator says the apparent issue allowed employees in the BMO Capital Markets division to allegedly sell mortgage-backed bonds using misleading metrics.
The SEC alleges that BMO sold US$3 billion worth of bonds between December 2020 and May 2023 without proper guidance to employees concerning the structure and sale of the bonds.
While BMO agreed to pay US$19.4 million in disgorgement, US$2.2 million in interest and a US$19 million civil penalty, it did not admit or deny the SEC’s findings.
BMO spokesman Jeff Roman says the bank holds itself to the highest standards of fair and ethical conduct and is pleased to have this matter behind it.
The charges are the latest example of U.S. regulators levelling substantial fines against Canadian banks, the most notable example being the more than US$3 billion TD Bank Group paid last year for anti-money laundering oversight failures.
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