Regulators had investigated misleading marketing practices on the US mortgage-backed bond side
Bank of Montreal (BMO) dismissed a managing director on its US mortgage-backed bond side last month in connection with an investigation by regulators into misleading marketing practices.
Doo Sik Lew, who had been with the bank for six years, was discharged by the company in December, a disclosure filed by BMO Capital Markets Corp. with the Financial Industry Regulatory Authority showed.
The executive contests the SEC’s allegations and is cooperating with the probe, the disclosure said, having first been approached by securities regulators in September 2023.
BMO Capital Markets was recently charged with failing to provide adequate oversight of employees who used misleading information to improve the marketability of mortgage-backed bonds.
The bank did not admit to or deny the allegations. It paid over $40 million (USD) to settle claims into that investigation, including nearly $20 million in gains to affected parties, a $19 million civil penalty, and about $2.2 million in interest.
BMO spokesperson Jeff Roman did not comment on a connection between the two matters, Bloomberg said, and the filing on Lew did not directly connect him to the investigation. Specific BMO employees were not named in the SEC settlement.
In an email to Bloomberg, Roman said the bank holds itself “to the highest standards of fair and ethical conduct” and continuously reviews and enhances its controls and supervisory framework – and that the matter was now “behind us.”
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