BMO Financial Group says it can document a $1.12-billion provision after a U.S. jury found it liable for a Ponzi scheme alleged to have been facilitated by a financial institution it purchased.
Toronto-based BMO says a jury awarded damages of US$564 million towards its U.S. subsidiary BMO Harris Bank N.A., whereas doable curiosity expenses from the alleged actions between 1999 and 2008 would increase the associated fee additional.
The financial institution says it can enchantment the choice to the U.S. Court of Appeals for the Eighth Circuit, together with submitting post-trial motions to reverse the decision or scale back the damages.
BMO says it’s disillusioned with the decision and that it has robust grounds for enchantment.
It says that due to prior settlements, it is entitled to get well about 21 per cent of damages. After taxes, the financial institution expects to take a cost of $830 million in its fourth quarter due to the ruling.
The financial institution acquired Marshall and Ilsley Bank in 2011, which is alleged to have facilitated the scheme carried out by Thomas J. Petters and others. Petters was convicted in 2009 of orchestrating the US$3.65-billion scheme.
This report by The Canadian Press was first revealed Nov. 9, 2022.