OSC Approves No-Contest Settlement Agreement with BMO Nesbitt Burns Inc., BMO Private Investment Counsel Inc., BMO Investments Inc. and BMO InvestorLine Inc.
December 15, 2016
The Ontario Securities Commission (OSC) today approved a no-contest settlement agreement with BMO Nesbitt Burns Inc., BMO Private Investment Counsel Inc., BMO Investments Inc. and BMO InvestorLine Inc. (the BMO Registrants) in relation to a matter that the BMO Registrants discovered and self-reported to the OSC.
This settlement follows allegations by OSC Staff that there were inadequacies in the BMO Registrants' systems of controls and supervision, which resulted in certain clients paying, directly or indirectly, excess fees that were not detected or corrected in a timely manner. OSC Staff do not allege, and have found no evidence of dishonest conduct by the BMO Registrants.
While having neither admitted nor denied the accuracy of the facts and conclusions of OSC Staff, the BMO Registrants have agreed to the settlement, and intend to compensate clients a total of $49,885,661, including opportunity costs on fees.
"The no-contest settlement is a strong enforcement tool that has resulted in more than a quarter of a billion dollars (approximately $320 million) in compensation to investors, through seven no-contest settlements," said Jeff Kehoe, Director of Enforcement at the OSC.
In addition to the compensation to investors, the BMO Registrants have made a payment of $2,100,000 to advance the OSC's mandate of protecting investors, plus a further payment of $90,000 to be allocated toward the costs of OSC Staff's investigation.
After reporting this matter, the BMO Registrants provided prompt, detailed and candid co-operation to OSC Staff. The BMO Registrants have also implemented additional controls and supervision to prevent a re-occurrence of this matter.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in the capital markets. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.gov.on.ca
Ontario Securities Commission