Ex-Bank Of Montreal Trader Fined $500,000;Banned From Industry
DOW JONES NEWSWIRES
A former senior commodities trader at Bank of Montreal (BMO) will pay $500,000
as part of a settlement with the Commodities Futures Trading Commission for
inflating the value of natural-gas holdings and conspiring to deceive the bank.
David Lee of New Jersey also agreed to no longer trade commodities.
Lee pleaded guilty a year ago to state and federal charges and was cooperating
with the probe. Others charged at the time was the former chief executive of
commodities broker Optionable Inc. (OPBL).
In May 2007, Bank of Montreal restated one quarter's results by about C$237
million after learning Lee had overvalued the bank's natural gas options
portfolio. The bank, at the time, determined that Lee's trading book was
overvalued by C$680 million.
The CFTC charged Lee with mis-marking his natural gas options positions
between May 2003 and May 2007 and with mis-valuing other natural gas options
positions from October 2006 through May 2007.
Lee and various brokers also were accused of deceiving Bank of Montreal by
fabricating broker quotes delivered to BMO’s back office for price
verification.
-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com
(END) Dow Jones Newswires
11-06-091038ET
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