Bank of Montreal sets aside $1.1 billion due to US fraud

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Bank of Montreal sets aside $1.1 billion due to fraud in the United States

A branch of the Bank of Montreal.

Bank of Montreal said on Wednesday it would record a $1.12 billion provision after a U.S. jury found it liable for an investment pyramid scheme that was allegedly facilitated by a bank she bought.

The Toronto-based bank said a jury had awarded damages of US$564 million to its US subsidiary BMO Harris Bank, while possible interest costs for alleged actions, which allegedly occurred between 1999 and 2008, could drive up that cost even further.

The bank said it would appeal the decision to the Court of Justice. #x27;appeal from the Eighth Circuit of the United States, and that she would file post-trial motions to set aside the verdict or reduce damages.

Bank of Montreal s& #x27;is said to be disappointed with the verdict and felt she had strong grounds for appeal.

She claimed that due to previous settlements , she was entitled to recover approximately 21% of the damages. After tax, the bank expects to take a charge of C$830 million in the fourth quarter as a result of the decision.

The bank acquired Marshall and Ilsley Bank in 2011, which would have facilitated the scheme implemented by Thomas J. Petters and others. Mr. Petters was convicted in 2009 of orchestrating the US$3.65 billion scheme.

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