TORONTO — BMO Financial Group says it has won the reversal of a 2022 jury verdict against the bank in a lawsuit related to a Ponzi scheme in the United States.
The Canadian bank says the U.S. Eighth Circuit Court of Appeals also instructed the district court to enter judgment in favour of BMO's U.S. subsidiary.
As a result of the decision, BMO says it plans to reverse a $1.19-billion provision, a move that it expects will mean an after-tax recovery of $875 million in its fourth quarter.
Plaintiffs in the case had alleged that Marshall and Ilsley Bank, which BMO bought in 2011, was complicit in the fraud carried out by Thomas J. Petters and others.
They alleged the bank served as "critical linchpin" for Petters who had a chequing account at the bank that was used to launder money.
Petters was convicted in 2009 of orchestrating the scheme and sentenced to 50 years in jail.
This report by The Canadian Press was first published Sept. 13, 2024.
Companies in this story: (TSX:BMO)
The Canadian Press
