BMO to pay C$50 million to compensate for excess fees
TORONTO (Reuters) - Bank of Montreal (BMO.TO: Quote) has agreed a no-contest settlement with the Ontario Securities Commission that will see the bank compensate customers a total of C$49.9 million ($37.4 million) for charging excess fees.
The OSC said the settlement follows allegations by OSC staff that there were inadequacies in BMO's systems of controls and supervision which resulted in some clients paying excess fees that were not detected or corrected in a timely manner.
In addition to the compensation, BMO has agreed to make a payment of C$2.1 million to the OSC, Canada's largest securities regulator, to help fund investor education and C$90,000 toward the cost of the investigation.
A number of other Canadian financial institutions have agreed to similar settlements. Canadian Imperial Bank of Commerce (CM.TO: Quote) said in October it had agreed to pay out C$73.3 million in compensation for excess fees.
Fund manager CI Investments agreed to a C$156 million settlement in February. Toronto-Dominion Bank (TD.TO: Quote) agreed to pay C$13.5 million to customers in 2014. Bank of Nova Scotia (BNS.TO: Quote) agreed to a C$20 million settlement in July.
"The no-contest settlement is a strong enforcement tool that has resulted in more than a quarter of a billion dollars in compensation to investors, through seven no-contest settlements," said Jeff Kehoe, the OSC's Director of Enforcement.
(Reporting by Matt Scuffham; Editing by Lisa Shumaker, Bernard Orr)
© Thomson Reuters 2017 All rights reserved.