BMO takes $1.1-billion provision on U.S. Ponzi scheme ruling

BMO says it will record a $1.12-billion provision after a U.S. jury found it liable for a Ponzi scheme alleged to have been facilitated by a bank it bought.

Toronto-based BMO says a jury awarded damages of US$564 million against its U.S. subsidiary BMO Harris Bank N.A., while possible interest charges from the alleged actions between 1999 and 2008 would boost the cost further.

The bank says it will appeal the decision to the U.S. Court of Appeals for the Eighth Circuit, along with filing post-trial motions to reverse the verdict or reduce the damages.

BMO says it is disappointed with the verdict and that it has strong grounds for appeal.