Bank wins US court appeal, securing a $875m after-tax recovery in its fourth quarter
BMO Financial Group has announced that it won the reversal of a 2022 jury verdict against the bank in a lawsuit related to a Ponzi scheme in the United States, according to BNN Bloomberg.
The US Eighth Circuit Court of Appeals instructed the district court to enter judgment in favour of BMO’s US subsidiary.
As a result of this ruling, BMO plans to reverse a $1.19bn provision. This decision is expected to result in an after-tax recovery of $875m, which the bank will record in its fourth quarter.
The plaintiffs had accused Marshall and Ilsley Bank, which BMO acquired in 2011, of being involved in the fraud orchestrated by Thomas J. Petters and others.
According to the lawsuit, the bank served as a “critical linchpin” for Petters, as he used his chequing account at the bank to launder money.
Petters was convicted in 2009 for his role in the Ponzi scheme and sentenced to 50 years in prison.
