Deal with the SEC resolves allegations of improper supervision in bond trades
BMO Capital Markets will pay over US$40 million to resolve allegations from the U.S. Securities and Exchange Commission (SEC) that it failed to properly supervise its agency bond trading operations.
The SEC announced Monday that BMO Capital was penalized for inadequate oversight of staff involved in selling mortgage-backed securities. These employees allegedly distributed offering materials and bond metrics that misrepresented the underlying collateral of the bonds.
Without admitting or denying the SEC's findings, BMO Capital consented to a settlement that includes US$19.4 million in disgorgement, US$2.2 million in pre-judgment interest, and a US$19 million civil fine.
